SB 380: California state preschool programs: age of eligibility.
- Session Year: 2023-2024
- House: Senate
- Latest Version Date: 2024-06-10
Current Status:
Failed
(2024-08-07: August 7 hearing postponed by committee.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
Existing law, the Early Education Act, among other things, requires the Superintendent of Public Instruction to administer all California state preschool programs, including, but not limited to, part-day and full-day age and developmentally appropriate programs for 3- and 4-year-old children. Existing law requires the State Department of Education, in collaboration with the State Department of Social Services, to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service, for California state preschool program contractors, as provided. Existing law requires each applicant or contracting agency to give priority for part-day and full-day California state preschool programs according to a specified priority order. Existing law establishes adjustment factors applicable to the reimbursement a contractor receives in order to reflect the additional expense of serving full-day and part-day preschool children who meet certain criteria and requires the adjustment factor for children who are 47 months or younger to be 1.8, as provided.
This bill, until July 1, 2027, would authorize, but not require, a California state preschool contractor operating a part-day, full-day, or both part- and full-day California state preschool program to enroll interested eligible 2-year-old children, as defined, and would make conforming changes. The bill, on or after July 1, 2027, would prohibit a contractor from serving any 2-year-old children, unless the contractor was serving those 2-year-old children before July 1, 2027. The bill, until July 1, 2027, would instead require the adjustment factor for 2-year-old and 3-year-old children to be 1.8 and would require the State Department of Education to ensure that the rate that contractors receive for 2-year-old children in each county for each setting and time base type is no less than the rate provided for children of the same age served in general child care and development programs, as provided.
(1)Existing law, the Early Education Act, among other things, requires the Superintendent of Public Instruction to administer all California state preschool programs, including, but not limited to, part-day and full-day age and developmentally appropriate programs for 3- and 4-year-old children. Existing law, the Child Care and Development Services Act, administered by the State Department of Social Services, establishes a system of child care and development services for children up to 13 years of age. Existing law requires the department, in collaboration with the State Department of Education, to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, as specified. Existing law requires the state and Child Care Providers United - California to establish a Joint Labor Management Committee to develop recommendations for a single reimbursement rate structure that has specified characteristics, and requires the Joint Labor Management Committee to present those recommendations to the Department of Finance no later than November 15, 2022. Existing law also requires the department, in consultation with the State Department of Education, to convene a working group to assess the existing quality standards for childcare and development and preschool programs and the methodology for establishing reimbursement rates for those programs, and requires the working group to provide recommendations relating to specified topics to a specified Joint Labor Management Committee, the Department of Finance, and the Joint Legislative Budget Committee no later than August 15, 2022.This bill would require the State Department of Social Services, in collaboration with the State Department of Education, to develop an alternative methodology for calculating subsidy payment rates for child care and development services and California state preschool program services that build upon and align with the recommendations of the working group and Joint Labor Management Committee, and that uses a cost estimation model, as specified. The bill would require the department to develop an interim transition plan, if necessary, to implement the alternative methodology, and to seek preapproval from the United States Department of Health and Human Services to amend the states current Child Care and Development Fund State Plan to change its current methodology for determining childcare and development and preschool subsidy payment rates to the alternative methodology. The bill would require the State Department of Social Services and the State Department of Education to implement the alternative methodology upon notice, in writing, by the State Department of Social Services to the Legislature that it has adopted the alternative methodology, as specified.(2)Existing law requires the State Department of Social Services, in consultation with the State Department of Education, to establish a fee schedule for families using preschool and child care and development services and requires families who utilize those services to be assessed a family fee that is based on income, certified family need for full-time or part-time care services, and enrollment. Existing law prohibits those family fees from exceeding 10% of the familys monthly income and prohibits family fees from being collected for the 202223 fiscal year.The bill would require the State Department of Social Services, in consultation with the State Department of Education, to develop an equitable sliding scale for the payment of family fees, and would suspend the collection of family fees until the new equitable sliding scale is implemented.(3)The Early Education Act requires the Superintendent of Public Instruction to adopt rules, regulations, and guidelines to facilitate the funding and reimbursement required by the act. Existing law requires, for the 202223 fiscal year only, contracting agencies operating a California state preschool to be reimbursed 100% of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less, if they meet specified criteria.This bill would delete the requirement that the above-described reimbursement rate apply only during the 202223 fiscal year, thereby extending that reimbursement rate for contracting agencies operating a California state preschool indefinitely. The bill would also delete the requirement of meeting specified criteria in order to obtain that reimbursement rate.Existing law requires reimbursement for full-day and part-day California state preschool family childcare home education network providers for the 202223 fiscal year to be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance.This bill would delete the requirement that the above-described reimbursement provision apply during the 202223 fiscal year, thereby extending that reimbursement provision for full-day and part-day California state preschool family childcare home education network providers indefinitely.(4)Existing law requires the State Department of Social Services to contract with local contracting agencies for alternative payment programs for childcare services to be provided throughout the state. Existing law requires the alternative payment program to reimburse childcare providers based upon specified criteria, including the actual days and hours of attendance for those families with variable schedules. Existing law also requires the department to administer general childcare and development programs, as specified.This bill would instead require the alternative payment program to reimburse childcare providers based on the maximum certified hours of care, as specified. The bill would require contracting agencies operating those general childcare and development programs to be reimbursed the lesser of 100% of the contract maximum reimbursable amount or net reimbursable program costs.(1)Existing law, the Early Education Act, among other things, requires the Superintendent of Public Instruction to administer all California state preschool programs, including, but not limited to, part-day and full-day age and developmentally appropriate programs for 3- and 4-year-old children. Existing law, the Child Care and Development Services Act, administered by the State Department of Social Services, establishes a system of child care and development services for children up to 13 years of age. Existing law requires the department, in collaboration with the State Department of Education, to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, as specified. Existing law requires the state and Child Care Providers United - California to establish a Joint Labor Management Committee to develop recommendations for a single reimbursement rate structure that has specified characteristics, and requires the Joint Labor Management Committee to present those recommendations to the Department of Finance no later than November 15, 2022. Existing law also requires the department, in consultation with the State Department of Education, to convene a working group to assess the existing quality standards for childcare and development and preschool programs and the methodology for establishing reimbursement rates for those programs, and requires the working group to provide recommendations relating to specified topics to a specified Joint Labor Management Committee, the Department of Finance, and the Joint Legislative Budget Committee no later than August 15, 2022.
This bill would require the State Department of Social Services, in collaboration with the State Department of Education, to develop an alternative methodology for calculating subsidy payment rates for child care and development services and California state preschool program services that build upon and align with the recommendations of the working group and Joint Labor Management Committee, and that uses a cost estimation model, as specified. The bill would require the department to develop an interim transition plan, if necessary, to implement the alternative methodology, and to seek preapproval from the United States Department of Health and Human Services to amend the states current Child Care and Development Fund State Plan to change its current methodology for determining childcare and development and preschool subsidy payment rates to the alternative methodology. The bill would require the State Department of Social Services and the State Department of Education to implement the alternative methodology upon notice by the State Department of Social Services to the Legislature that it has adopted the alternative methodology. notice, in writing, by the State Department of Social Services to the Legislature that it has adopted the alternative methodology, as specified.
(2)Existing law requires the State Department of Social Services, in consultation with the State Department of Education, to establish a fee schedule for families using preschool and child care and development services and requires families who utilize those services to be assessed a family fee that is based on income, certified family need for full-time or part-time care services, and enrollment. Existing law prohibits those family fees from exceeding 10% of the familys monthly income and prohibits family fees from being collected for the 202223 fiscal year.
The bill would require the State Department of Social Services, in consultation with the State Department of Education, to develop an equitable sliding scale for the payment of family fees, and would suspend the collection of family fees until the new equitable sliding scale is implemented.
(3)The Early Education Act requires the Superintendent of Public Instruction to adopt rules, regulations, and guidelines to facilitate the funding and reimbursement required by the act. Existing law requires, for the 202223 fiscal year only, contracting agencies operating a California state preschool to be reimbursed 100% of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less, if they meet specified criteria.
This bill would delete the requirement that the above-described reimbursement rate apply only during the 202223 fiscal year, thereby extending that reimbursement rate for contracting agencies operating a California state preschool indefinitely. The bill would also delete the requirement of meeting specified criteria in order to obtain that reimbursement rate.
Existing law requires reimbursement for full-day and part-day California state preschool family childcare home education network providers for the 202223 fiscal year to be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance.
This bill would delete the requirement that the above-described reimbursement provision apply during the 202223 fiscal year, thereby extending that reimbursement provision for full-day and part-day California state preschool family childcare home education network providers indefinitely.
(4)Existing law requires the State Department of Social Services to contract with local contracting agencies for alternative payment programs for childcare services to be provided throughout the state. Existing law requires the alternative payment program to reimburse childcare providers based upon specified criteria, including the actual days and hours of attendance for those families with variable schedules. Existing law also requires the department to administer general childcare and development programs, as specified.
This bill would instead require the alternative payment program to reimburse childcare providers based on the maximum certified hours of care, as specified. The bill would require contracting agencies operating those general childcare and development programs to be reimbursed the lesser of 100% of the contract maximum reimbursable amount or net reimbursable program costs.
(1)Existing law, the Early Education Act, among other things, requires the Superintendent of Public Instruction to administer all California state preschool programs, including, but not limited to, part-day and full-day age and developmentally appropriate programs for 3- and 4-year-old children. Existing law, the Child Care and Development Services Act, administered by the State Department of Social Services, establishes a system of childcare child care and development services for children up to 13 years of age. Existing law requires the department, in collaboration with the State Department of Education, to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, as specified. Existing law requires the state and Child Care Providers United - California to establish a Joint Labor Management Committee to develop recommendations for a single reimbursement rate structure that has specified characteristics, and requires the Joint Labor Management Committee to present those recommendations to the Department of Finance no later than November 15, 2022. Existing law also requires the department, in consultation with the State Department of Education, to convene a working group to assess the existing quality standards for childcare and development and preschool programs and the methodology for establishing reimbursement rates for those programs, and requires the working group to provide recommendations relating to specified topics to a specified Joint Labor Management Committee, the Department of Finance, and the Joint Legislative Budget Committee no later than August 15, 2022.
This bill would require the State Department of Social Services, in collaboration with the State Department of Education, to develop an alternative methodology for calculating reimbursement subsidy payment rates for child care and development services and California state preschool program services that build upon and align with the recommendations of the working group and Joint Labor Management Committee, and that uses a cost estimation model, as specified. The bill would require the department to develop a transition methodology an interim transition plan, if necessary, to implement the alternative methodology, and to seek preapproval from the United States Department of Health and Human Services to amend the states current Child Care and Development Fund State Plan to change its current methodology for determining childcare and development and preschool reimbursement subsidy payment rates to the alternative methodology. The bill would require the State Department of Social Services and the State Department of Education to implement the alternative methodology upon notice by the State Department of Social Services to the Legislature that it has adopted the alternative methodology.
Existing(2)Existing law requires the State Department of Social Services, in consultation with the State Department of Education, to establish a fee schedule for families using preschool and child care and development services and requires families who utilize those services to be assessed a family fee that is based on income, certified family need for full-time or part-time care services, and enrollment. Existing law prohibits those family fees from exceeding 10% of the familys monthly income and prohibits family fees from being collected for the 202223 fiscal year.
The bill would require the State Department of Social Services, in consultation with the State Department of Education, to develop an equitable sliding scale for the payment of family fees, and would suspend the collection of family fees until the new equitable sliding scale is implemented.
(3)The Early Education Act requires the Superintendent of Public Instruction to adopt rules, regulations, and guidelines to facilitate the funding and reimbursement required by the act. Existing law requires, for the 202223 fiscal year only, contracting agencies operating a California state preschool to be reimbursed 100% of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less, if they meet specified criteria.
This bill would delete the requirement that the above-described reimbursement rate apply only during the 202223 fiscal year, thereby extending that reimbursement rate for contracting agencies operating a California state preschool indefinitely. The bill would also delete the requirement of meeting specified criteria in order to obtain that reimbursement rate.
Existing law requires reimbursement for full-day and part-day California state preschool family childcare home education network providers for the 202223 fiscal year to be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance.
This bill would delete the requirement that the above-described reimbursement provision apply during the 202223 fiscal year, thereby extending that reimbursement provision for full-day and part-day California state preschool family childcare home education network providers indefinitely.
(4)Existing law requires the State Department of Social Services to contract with local contracting agencies for alternative payment programs for childcare services to be provided throughout the state. Existing law requires the alternative payment program to reimburse childcare providers based upon specified criteria, including the actual days and hours of attendance for those families with variable schedules.
This bill would instead require the alternative payment program to reimburse childcare providers based on the maximum certified hours of care, as specified.
Existing law, the Early Education Act, among other things, requires the Superintendent of Public Instruction to administer all California state preschool programs, including, but not limited to, part-day and full-day age and developmentally appropriate programs for 3- and 4-year-old children. Existing law, the Child Care and Development Services Act, administered by the State Department of Social Services, establishes a system of childcare and development services for children up to 13 years of age. Existing law requires the department, in collaboration with the State Department of Education, to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, as specified. Existing law requires the state and Child Care Providers United - California to establish a Joint Labor Management Committee to develop recommendations for a single reimbursement rate structure that has specified characteristics, and requires the Joint Labor Management Committee to present those recommendations to the Department of Finance no later than November 15, 2022. Existing law also requires the department, in consultation with the State Department of Education, to convene a working group to assess the existing quality standards for childcare and development and preschool programs and the methodology for establishing reimbursement rates for those programs, and requires the working group to provide recommendations relating to specified topics to a specified Joint Labor Management Committee, the Department of Finance, and the Joint Legislative Budget Committee no later than August 15, 2022.
This bill would state the intent of the Legislature to enact legislation relating to rate reform for workers in childcare.This bill would require the State Department of Social Services, in collaboration with the State Department of Education, to develop an alternative methodology for calculating reimbursement rates for child care and development services and California state preschool program services that build upon and align with the recommendations of the working group and Joint Labor Management Committee, and that uses a cost estimation model, as specified. The bill would require the department to develop a transition methodology to implement the alternative methodology, and to seek preapproval from the United States Department of Health and Human Services to amend the states current Child Care and Development Fund State Plan to change its current methodology for determining childcare and development and preschool reimbursement rates to the alternative methodology.
Existing law requires the State Department of Social Services, in consultation with the State Department of Education, to establish a fee schedule for families using preschool and child care and development services and requires families who utilize those services to be assessed a family fee that is based on income, certified family need for full-time or part-time care services, and enrollment. Existing law prohibits those family fees from exceeding 10% of the familys monthly income and prohibits family fees from being collected for the 202223 fiscal year.
The bill would require the State Department of Social Services, in consultation with the State Department of Education, to develop an equitable sliding scale for the payment of family fees, and would suspend the collection of family fees until the new equitable sliding scale is implemented.
The Child Care and Development Services Act, administered by the State Department of Social Services, establishes a system of childcare and development services for children up to 13 years of age. Existing law requires the department, in collaboration with the State Department of Education, to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, as specified.
This bill would state the intent of the Legislature to enact legislation relating to rate reform for workers in childcare.
As used in this chapter:
(a)Applicant or contracting agency means a school district, community college district, college or university, county superintendent of schools, county, city, public agency, private nontax-exempt agency, private tax-exempt agency, or other entity that is authorized to establish, maintain, or operate services pursuant to this chapter. Private agencies and parent cooperatives, duly licensed by law, shall receive the same consideration as any other authorized entity with no loss of parental decisionmaking prerogatives as consistent with the provisions of this chapter.
(b)Assigned reimbursement rate is that rate established by the contract with the agency in accordance with Section 8242.
(c)Attendance means the number of children present at a preschool facility. Attendance, for purposes of reimbursement, includes excused absences by children because of illness, quarantine, illness or quarantine of their parent, family emergency, or to spend time with a parent or other relative as required by a court of law or that is clearly in the best interest of the child.
(d)Capital outlay means the amount paid for the renovation and repair of childcare and development and preschool facilities to comply with state and local health and safety standards, and the amount paid for the state purchase of relocatable childcare and development and preschool facilities for lease to qualifying contracting agencies.
(e)Preschool facility means a residence or building or part thereof in which preschool services are provided.
(f)Early childhood programs means those programs that offer a full range of services for children from infancy to 13 years of age, for any part of a day, by a public, private, or proprietary agency, in centers and family childcare homes.
(g)Children at risk of abuse, neglect, or exploitation means children who are so identified in a written referral from a legal, medical, or social service agency, or emergency shelter.
(h)Children with exceptional needs means either of the following:
(1)Children under three years of age who have been determined to be eligible for early intervention services pursuant to the California Early Intervention Services Act (Title 14 (commencing with Section 95000) of the Government Code) and its implementing regulations. These children include an infant or toddler with a developmental delay or established risk condition, or who is at high risk of having a substantial developmental disability, as defined in subdivision (a) of Section 95014 of the Government Code. These children shall have active individualized family service plans and shall be receiving early intervention services.
(2)Children 3 to 21 years of age, inclusive, who have been determined to be eligible for special education and related services by an individualized education program team according to the special education requirements contained in Part 30 (commencing with Section 56000) of Division 4 of Title 2, and who meet eligibility criteria described in Section 56026 and, Article 2.5 (commencing with Section 56333) of Chapter 4 of Part 30 of Division 4 of Title 2, and Sections 3030 and 3031 of Title 5 of the California Code of Regulations. These children shall have an active individualized education program and shall be receiving early intervention services or appropriate special education.
(i)Cost includes, but is not limited to, expenditures that are related to the operation of preschool programs. Cost may include a reasonable amount for state and local contributions to employee benefits, including approved retirement programs, agency administration, and any other reasonable program operational costs. Cost may also include amounts for licensable facilities in the community served by the program, including lease payments or depreciation, downpayments, and payments of principal and interest on loans incurred to acquire, rehabilitate, or construct licensable facilities, but these costs shall not exceed fair market rents existing in the community in which the facility is located. Reasonable and necessary costs are costs that, in nature and amount, do not exceed what an ordinary prudent person would incur in the conduct of a competitive business.
(j)Elementary school, as contained in former Section 425 of Title 20 of the United States Code (the National Defense Education Act of 1958, Public Law 85-864, as amended), includes early childhood education programs and all child development programs, for the purpose of the cancellation provisions of loans to students in institutions of higher learning.
(k)Family childcare home education network means an entity organized under law that contracts with the department to make payments to licensed family childcare home providers and to provide educational and support services to those providers and to children and families eligible for California state preschool program services.
(l)Health services include, but are not limited to, all of the following:
(1)Referral, whenever possible, to appropriate health care providers able to provide continuity of medical care.
(2)Health screening and health treatment, including a full range of immunization recorded on the appropriate state immunization form to the extent provided by the Medi-Cal Act (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code) and the Child Health and Disability Prevention Program (Article 6 (commencing with Section 124025) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code), but only to the extent that ongoing care cannot be obtained utilizing community resources.
(3)Health education and training for children, parents, staff, and providers.
(4)Followup treatment through referral to appropriate health care agencies or individual health care professionals.
(m)Higher educational institutions means the Regents of the University of California, the Trustees of the California State University, the Board of Governors of the California Community Colleges, and the governing bodies of any accredited private nonprofit institution of postsecondary education.
(n)Intergenerational staff means persons of various generations.
(o)Dual language learner children means children whose first language is a language other than English or children who are developing two or more languages, one of which may be English.
(p)Parent means a biological parent, stepparent, adoptive parent, foster parent, caretaker relative, or any other adult living with a child who has responsibility for the care and welfare of the child.
(q)Program director means a person who, pursuant to Section 8298, is qualified to serve as a program director.
(r)Proprietary agency means an organization or facility providing preschool, which is operated for profit.
(s)Children with severe disabilities are children with exceptional needs from birth to 21 years of age, inclusive, who require intensive instruction and training in programs serving pupils with the following profound disabilities: autism, blindness, deafness, severe orthopedic impairments, serious emotional disturbances, or severe intellectual disabilities. Children with severe disabilities also include those individuals who would have been eligible for enrollment in a developmental center for handicapped pupils under Chapter 6 (commencing with Section 56800) of Part 30 of Division 4 of Title 2 as it read on January 1, 1980.
(t)(1)Site supervisor means a person who, regardless of their title, has operational program responsibility for an early childhood program at a single site.
(2)A site supervisor shall satisfy one of the following:
(A)Hold a permit issued by the Commission on Teacher Credentialing that authorizes supervision of a childcare and development program operating in a single site.
(B)Hold an administrative credential or an administrative services credential issued by the Commission on Teacher Credentialing.
(C)Meet the qualifications of a program director under Section 8298.
(3)The Superintendent may waive the requirements of this subdivision if the Superintendent determines that the existence of compelling need is appropriately documented.
(u)Standard reimbursement rate means the reimbursement rate applicable to California state preschool programs pursuant to Section 8242.
(v)Startup costs means those expenses an agency incurs in the process of opening a new or additional facility before the full enrollment of children.
(w)California state preschool program means those programs that offer part-day or full-day, or both, educational programs for eligible three- two-, three-, and four-year-old children. These programs may be offered by a public, private, or proprietary agency, and operated in childcare centers or family childcare homes operating through a family childcare home education network.
(x)Support services means those services that, when combined with preschool services, help promote the healthy physical, mental, social, and emotional growth of children. Support services may include, but are not limited to: protective services, parent training, provider and staff training, transportation, parent and child counseling, child development resource and referral services, and child placement counseling.
(y)Teacher means a person with the appropriate permit issued by the Commission on Teacher Credentialing who provides program supervision and instruction that includes supervision of a number of aides, volunteers, and groups of children.
(z)Underserved area means a county or subcounty area, including, but not limited to, school districts, census tracts, or ZIP Code areas, where the ratio of publicly subsidized preschool program services to the need for these services is low, as determined by the Superintendent.
(aa)Three-year-old children means children who will have their third birthday on or before December 1 of the fiscal year in which they are enrolled in a California state preschool program. Children who have their third birthday on or after December 2 of the fiscal year, may be enrolled in a California state preschool program on or after their third birthday. Any child under four years of age shall be served in a California state preschool program facility, licensed in accordance with Title 22 of the California Code of Regulations.
(ab)Two-year-old children means children who have had their second birthday and do not otherwise meet the definition of three-year-old children.
(ab)(ac)Four-year-old children means children who will have their fourth birthday on or before December 1 of the fiscal year in which they are enrolled in a California state preschool program, or a child whose fifth birthday occurs after September 1 of the fiscal year in which they are enrolled in a California state preschool and whose parent or guardian has opted to retain or enroll them in a California state preschool program.
(ac)(ad)Homeless children and youth has the same meaning as defined in Section 11434a(2) of the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.).
(ad)(ae)Local educational agency means a school district, a county office of education, a community college district, or a school district acting on behalf of one or more schools within the school district.
(ae)(af)Funded enrollment means the number of subsidized children funded to be enrolled, based on the maximum reimbursable amount, contract rate, inclusive of any adjustment factors, and approved program calendar, by a California state preschool program contractor.
(af)(ag)(1)Effective no later than March 1, 2024, part-time means preschool services certified for a child for fewer than 25 hours per week.
(2)Effective no later than March 1, 2024, full-time means preschool services certified for a child for 25 or more hours per week.
(3)Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, until regulations are filed with the Secretary of State to implement this subdivision, the department may implement this subdivision through management bulletins or similar letters of instruction on or before December 31, 2023.
(4)The department shall initiate a rulemaking action to adopt regulations to implement this subdivision no later than July 1, 2026.
(5)If the provisions of this subdivision are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 10426 of the Welfare and Institutions Code, the memorandum of understanding shall be controlling without further legislative action, except that if such provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.
(ah)This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.
SEC. 2.Section 8205 is added to the Education Code, to read:8205.As used in this chapter:
(a)Applicant or contracting agency means a school district, community college district, college or university, county superintendent of schools, county, city, public agency, private nontax-exempt agency, private tax-exempt agency, or other entity that is authorized to establish, maintain, or operate services pursuant to this chapter. Private agencies and parent cooperatives, duly licensed by law, shall receive the same consideration as any other authorized entity with no loss of parental decisionmaking prerogatives as consistent with the provisions of this chapter.
(b)Assigned reimbursement rate is that rate established by the contract with the agency in accordance with Section 8242.
(c)Attendance means the number of children present at a preschool facility. Attendance, for purposes of reimbursement, includes excused absences by children because of illness, quarantine, illness or quarantine of their parent, family emergency, or to spend time with a parent or other relative as required by a court of law or that is clearly in the best interest of the child.
(d)Capital outlay means the amount paid for the renovation and repair of childcare and development and preschool facilities to comply with state and local health and safety standards, and the amount paid for the state purchase of relocatable childcare and development and preschool facilities for lease to qualifying contracting agencies.
(e)Preschool facility means a residence or building or part thereof in which preschool services are provided.
(f)Early childhood programs means those programs that offer a full range of services for children from infancy to 13 years of age, for any part of a day, by a public, private, or proprietary agency, in centers and family childcare homes.
(g)Children at risk of abuse, neglect, or exploitation means children who are so identified in a written referral from a legal, medical, or social service agency, or emergency shelter.
(h)Children with exceptional needs means either of the following:
(1)Children under three years of age who have been determined to be eligible for early intervention services pursuant to the California Early Intervention Services Act (Title 14 (commencing with Section 95000) of the Government Code) and its implementing regulations. These children include an infant or toddler with a developmental delay or established risk condition, or who is at high risk of having a substantial developmental disability, as defined in subdivision (a) of Section 95014 of the Government Code. These children shall have active individualized family service plans and shall be receiving early intervention services.
(2)Children 3 to 21 years of age, inclusive, who have been determined to be eligible for special education and related services by an individualized education program team according to the special education requirements contained in Part 30 (commencing with Section 56000) of Division 4 of Title 2, and who meet eligibility criteria described in Section 56026 and, Article 2.5 (commencing with Section 56333) of Chapter 4 of Part 30 of Division 4 of Title 2, and Sections 3030 and 3031 of Title 5 of the California Code of Regulations. These children shall have an active individualized education program and shall be receiving early intervention services or appropriate special education.
(i)Cost includes, but is not limited to, expenditures that are related to the operation of preschool programs. Cost may include a reasonable amount for state and local contributions to employee benefits, including approved retirement programs, agency administration, and any other reasonable program operational costs. Cost may also include amounts for licensable facilities in the community served by the program, including lease payments or depreciation, downpayments, and payments of principal and interest on loans incurred to acquire, rehabilitate, or construct licensable facilities, but these costs shall not exceed fair market rents existing in the community in which the facility is located. Reasonable and necessary costs are costs that, in nature and amount, do not exceed what an ordinary prudent person would incur in the conduct of a competitive business.
(j)Elementary school, as contained in former Section 425 of Title 20 of the United States Code (the National Defense Education Act of 1958, Public Law 85-864, as amended), includes early childhood education programs and all child development programs, for the purpose of the cancellation provisions of loans to students in institutions of higher learning.
(k)Family childcare home education network means an entity organized under law that contracts with the department to make payments to licensed family childcare home providers and to provide educational and support services to those providers and to children and families eligible for California state preschool program services.
(l)Health services include, but are not limited to, all of the following:
(1)Referral, whenever possible, to appropriate health care providers able to provide continuity of medical care.
(2)Health screening and health treatment, including a full range of immunization recorded on the appropriate state immunization form to the extent provided by the Medi-Cal Act (Chapter 7 (commencing with Section 14000) of Part 3 of Division 9 of the Welfare and Institutions Code) and the Child Health and Disability Prevention Program (Article 6 (commencing with Section 124025) of Chapter 3 of Part 2 of Division 106 of the Health and Safety Code), but only to the extent that ongoing care cannot be obtained utilizing community resources.
(3)Health education and training for children, parents, staff, and providers.
(4)Followup treatment through referral to appropriate health care agencies or individual health care professionals.
(m)Higher educational institutions means the Regents of the University of California, the Trustees of the California State University, the Board of Governors of the California Community Colleges, and the governing bodies of any accredited private nonprofit institution of postsecondary education.
(n)Intergenerational staff means persons of various generations.
(o)Dual language learner children means children whose first language is a language other than English or children who are developing two or more languages, one of which may be English.
(p)Parent means a biological parent, stepparent, adoptive parent, foster parent, caretaker relative, or any other adult living with a child who has responsibility for the care and welfare of the child.
(q)Program director means a person who, pursuant to Section 8298, is qualified to serve as a program director.
(r)Proprietary agency means an organization or facility providing preschool, which is operated for profit.
(s)Children with severe disabilities are children with exceptional needs from birth to 21 years of age, inclusive, who require intensive instruction and training in programs serving pupils with the following profound disabilities: autism, blindness, deafness, severe orthopedic impairments, serious emotional disturbances, or severe intellectual disabilities. Children with severe disabilities also include those individuals who would have been eligible for enrollment in a developmental center for handicapped pupils under Chapter 6 (commencing with Section 56800) of Part 30 of Division 4 of Title 2 as it read on January 1, 1980.
(t)(1)Site supervisor means a person who, regardless of their title, has operational program responsibility for an early childhood program at a single site.
(2)A site supervisor shall satisfy one of the following:
(A)Hold a permit issued by the Commission on Teacher Credentialing that authorizes supervision of a childcare and development program operating in a single site.
(B)Hold an administrative credential or an administrative services credential issued by the Commission on Teacher Credentialing.
(C)Meet the qualifications of a program director under Section 8298.
(3)The Superintendent may waive the requirements of this subdivision if the Superintendent determines that the existence of compelling need is appropriately documented.
(u)Standard reimbursement rate means the reimbursement rate applicable to California state preschool programs pursuant to Section 8242.
(v)Startup costs means those expenses an agency incurs in the process of opening a new or additional facility before the full enrollment of children.
(w)California state preschool program means those programs that offer part-day or full-day, or both, educational programs for eligible three- and four-year-old children. These programs may be offered by a public, private, or proprietary agency, and operated in childcare centers or family childcare homes operating through a family childcare home education network.
(x)Support services means those services that, when combined with preschool services, help promote the healthy physical, mental, social, and emotional growth of children. Support services may include, but are not limited to: protective services, parent training, provider and staff training, transportation, parent and child counseling, child development resource and referral services, and child placement counseling.
(y)Teacher means a person with the appropriate permit issued by the Commission on Teacher Credentialing who provides program supervision and instruction that includes supervision of a number of aides, volunteers, and groups of children.
(z)Underserved area means a county or subcounty area, including, but not limited to, school districts, census tracts, or ZIP Code areas, where the ratio of publicly subsidized preschool program services to the need for these services is low, as determined by the Superintendent.
(aa)Three-year-old children means children who will have their third birthday on or before December 1 of the fiscal year in which they are enrolled in a California state preschool program. Children who have their third birthday on or after December 2 of the fiscal year, may be enrolled in a California state preschool program on or after their third birthday. Any child under four years of age shall be served in a California state preschool program facility, licensed in accordance with Title 22 of the California Code of Regulations.
(ab)Four-year-old children means children who will have their fourth birthday on or before December 1 of the fiscal year in which they are enrolled in a California state preschool program, or a child whose fifth birthday occurs after September 1 of the fiscal year in which they are enrolled in a California state preschool and whose parent or guardian has opted to retain or enroll them in a California state preschool program.
(ac)Homeless children and youth has the same meaning as defined in Section 11434a(2) of the federal McKinney-Vento Homeless Assistance Act (42 U.S.C. Sec. 11301 et seq.).
(ad)Local educational agency means a school district, a county office of education, a community college district, or a school district acting on behalf of one or more schools within the school district.
(ae)Funded enrollment means the number of subsidized children funded to be enrolled, based on the maximum reimbursable amount, contract rate, inclusive of any adjustment factors, and approved program calendar, by a California state preschool program contractor.
(af)(1)Effective no later than March 1, 2024, part-time means preschool services certified for a child for fewer than 25 hours per week.
(2)Effective no later than March 1, 2024, full-time means preschool services certified for a child for 25 or more hours per week.
(3)Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, until regulations are filed with the Secretary of State to implement this subdivision, the department may implement this subdivision through management bulletins or similar letters of instruction on or before December 31, 2023.
(4)The department shall initiate a rulemaking action to adopt regulations to implement this subdivision no later than July 1, 2026.
(5)If the provisions of this subdivision are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 10426 of the Welfare and Institutions Code, the memorandum of understanding shall be controlling without further legislative action, except that if such provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.
(ag)This section shall become operative on July 1, 2027.
SEC. 3.Section 8207 of the Education Code is amended to read:8207.(a)The Superintendent shall administer all California state preschool programs. Those programs shall include, but not be limited to, part-day and full-day age and developmentally appropriate programs, offered through childcare centers and family childcare home education networks, that are designed to facilitate the transition to kindergarten for three- two-, three-, and four-year-old children and that provide early learning and care, health services, social services, nutritional services, parent education and parent participation, evaluation, and staff development, and that comply with all applicable statutory and regulatory requirements, including, but not limited to, Section 1596.955 of the Health and Safety Code. requirements. Preschool programs for which federal reimbursement is not available shall be funded as prescribed by the Legislature in the annual Budget Act, and unless otherwise specified by the Legislature, shall not use federal funds made available through Title XX of the federal Social Security Act (42 U.S.C. Sec. 1397).
(b)A child under four years of age shall be served in a California state preschool program facility that is licensed in accordance with Title 22 of the California Code of Regulations. This section shall not be construed to authorize a local educational agency operating a license-exempt California state preschool program facility to serve children under four years of age.
(b)(c)A part-day California state preschool program shall operate for a minimum of (1) three hours per day, excluding time for home-to-school transportation, and (2) a minimum of 175 days per year, unless the contract specifies a lower number of days of operation.
(c)(d)A full-day California state preschool program shall operate for a minimum of 246 days per year, unless the contract specifies a lower number of days of operation.
(d)(e)Any agency described in subdivision (a) of Section 8205 as an applicant or contracting agency is eligible to contract to operate a California state preschool program.
(e)(f)Public funds shall not be paid directly or indirectly to an agency that does not pay at least the minimum wage to each of its employees.
(f)(g)Federal Head Start funds used to provide services to families receiving California state preschool services shall be deemed nonrestricted funds.
(g)(h)School districts and charter schools that administer a California state preschool program may place four-year-old children in a transitional kindergarten program classroom in accordance with subdivisions (h) to (j), inclusive, of Section 48000.
(h)(i)California state preschool programs shall include all of the following:
(1)Age- and developmentally appropriate activities for children.
(2)Supervision.
(3)Parenting education and parent engagement.
(4)Social services that include, but are not limited to, identification of child and family needs and referral to appropriate agencies.
(5)Health services.
(6)Nutrition.
(7)Training and career ladder opportunities, documentation of which shall be provided to the department.
(i)(j)The Superintendent shall adopt rules and regulations related to the administration of this chapter, including rules and regulations related to eligibility, enrollment, and priority of services. Regulations shall also include the recommendations of the State Department of Health Care Services relative to health care screening and the provision of health care services. The Superintendent shall seek the advice and assistance of these health authorities in situations where service under this chapter includes or requires care of children who are ill or have exceptional needs.
(k)This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.
SEC. 4.Section 8207 is added to the Education Code, to read:8207.(a)The Superintendent shall administer all California state preschool programs. Those programs shall include, but not be limited to, part-day and full-day age and developmentally appropriate programs, offered through childcare centers and family childcare home education networks, that are designed to facilitate the transition to kindergarten for three- and four-year-old children and that provide early learning and care, health services, social services, nutritional services, parent education and parent participation, evaluation, and staff development, and that comply with all applicable statutory and regulatory requirements. Preschool programs for which federal reimbursement is not available shall be funded as prescribed by the Legislature in the annual Budget Act, and unless otherwise specified by the Legislature, shall not use federal funds made available through Title XX of the federal Social Security Act (42 U.S.C. Sec. 1397).
(b)A part-day California state preschool program shall operate for a minimum of (1) three hours per day, excluding time for home-to-school transportation, and (2) a minimum of 175 days per year, unless the contract specifies a lower number of days of operation.
(c)A full-day California state preschool program shall operate for a minimum of 246 days per year, unless the contract specifies a lower number of days of operation.
(d)Any agency described in subdivision (a) of Section 8205 as an applicant or contracting agency is eligible to contract to operate a California state preschool program.
(e)Public funds shall not be paid directly or indirectly to an agency that does not pay at least the minimum wage to each of its employees.
(f)Federal Head Start funds used to provide services to families receiving California state preschool services shall be deemed nonrestricted funds.
(g)School districts and charter schools that administer a California state preschool program may place four-year-old children in a transitional kindergarten program classroom in accordance with subdivisions (h) to (j), inclusive, of Section 48000.
(h)California state preschool programs shall include all of the following:
(1)Age- and developmentally appropriate activities for children.
(2)Supervision.
(3)Parenting education and parent engagement.
(4)Social services that include, but are not limited to, identification of child and family needs and referral to appropriate agencies.
(5)Health services.
(6)Nutrition.
(7)Training and career ladder opportunities, documentation of which shall be provided to the department.
(i)The Superintendent shall adopt rules and regulations related to the administration of this chapter, including rules and regulations related to eligibility, enrollment, and priority of services. Regulations shall also include the recommendations of the State Department of Health Care Services relative to health care screening and the provision of health care services. The Superintendent shall seek the advice and assistance of these health authorities in situations where service under this chapter includes or requires care of children who are ill or have exceptional needs.
(j)This section shall become operative on July 1, 2027.
SEC. 5.Section 8207.1 is added to the Education Code, to read:8207.1.(a)A California state preschool contractor operating a part-day, full-day, or both part- and full-day California state preschool program may, but is not required to, enroll interested eligible two-year-old children.
(b)The Superintendent shall develop guidance for contractors to follow when enrolling two-year-old children.
(c)Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, on or before April 1, 2025, the department may implement this section and associated guidance on serving two-year-old children through management bulletins or similar letters of instruction.
(d)This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.
SEC. 6.Section 8207.1 is added to the Education Code, to read:8207.1.(a)A contractor shall not serve any two-year-old children, as defined in Section 8205 as that section read on June 30, 2027, unless the contractor was serving those two-year-old children before July 1, 2027. The adjustment factors and rates described in Section 8244 as that section read on June 30, 2027, shall apply to those two-year-old children.
(b)This section shall become operative on July 1, 2027.
SEC. 7.Section 8208 of the Education Code is amended to read:8208.(a)(1)A three- or four-year-old child is eligible for the part-day California state preschool program if the childs family is one of the following: both of the following requirements are met:
(A)The child is one of the following:
(i)A two-year-old child and the California state preschool program has chosen to enroll the two-year-old child in accordance with the guidance developed pursuant to Section 8207.1.
(ii)A three-year-old child.
(iii)A four-year-old child.
(iv)Enrolled in kindergarten pursuant to Section 48000.
(B)The childs family is one of the following:
(A)(i)A current aid recipient.
(B)(ii)Income eligible.
(C)(iii)Homeless.
(D)(iv)One whose children are recipients of child protective services, or whose children have been identified as being abused, neglected, or exploited, or at risk of being abused, neglected, or exploited.
(E)(i)One that(v)(I)One that has children with exceptional needs, as defined in Section 8205.
(ii)(II)Only the children in the family who are children with exceptional needs may be enrolled under the eligibility criteria of this subparagraph. Any other child in the family without exceptional needs may be enrolled pursuant to any of the criteria established in subparagraphs (A) to (D), inclusive.
(F)(vi)One who has a member of its household who is certified to receive benefits from Medi-Cal, CalFresh, the California Food Assistance Program, the California Special Supplemental Nutrition Program for Women, Infants, and Children, the federal Food Distribution Program on Indian Reservations, Head Start, Early Head Start, or any other designated means-tested government program, as determined by the department. Children eligible for services pursuant to this subparagraph shall be prioritized by the income declared on the application for the means-tested government program.
(2)Notwithstanding any other law, a part-day California state preschool program may provide services to children in families whose income is no more than 15 percent above the income eligibility threshold, as described in Section 8213, after all eligible three- two-, three-, and four-year-old children have been enrolled. No more than 10 percent of children enrolled, calculated throughout the participating programs entire contract, may be filled by children in families above the income eligibility threshold.
(3)Notwithstanding Section 8213, after all otherwise eligible children have been enrolled as provided in paragraphs (1) and (2), a part-day California state preschool program may provide services to three- two-, three-, and four-year-old children in families whose income is above the income eligibility threshold if those children are children with exceptional needs. Children receiving services pursuant to this paragraph shall not count towards the 10-percent limit in paragraph (2).
(4)Notwithstanding any other law, after all otherwise eligible children have been enrolled as provided in paragraphs (1) to (3), inclusive, a provider operating a part-day state preschool program within the attendance boundary of a public school, as set forth in Section 8217, may enroll three- two-, three-, and four-year-old children.
(b)A part-day California state preschool program contracting agency shall certify eligibility and enroll families into their program within 120 calendar days prior to the first day of the beginning of the new preschool year. Subsequent to enrollment, a child shall be deemed eligible for a part-day California state preschool program for the remainder of the program year and for the following program year, as long as applicable age-eligibility requirements are met, as specified in Sections 8205 and 48000.
(c)(1)(A)Commencing July 1, 2022, until June 30, 2025, inclusive, at least 5 percent of a part-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205.
(B)Commencing July 1, 2025, to June 30, 2026, inclusive, at least 7.5 percent of a part-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205.
(C)Commencing July 1, 2026, at least 10 percent of a part-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205, and serve those children.
(2)(A)The department shall review data on compliance and provide technical assistance to California state preschool program contracting agencies to assist them in meeting the requirement described in paragraph (1).
(B)Agencies shall be fully funded for the percentage of enrollment specified in paragraph (1), inclusive of the exceptional needs adjustment factor for that enrollment pursuant to Section 8244, to ensure funding is available to enroll children with exceptional needs within the set aside specified in paragraph (1) at any point during the fiscal year. An agency not meeting the requirement to fill the percent of funded enrollment specified in paragraph (1) with children with exceptional needs shall conduct community outreach to special education partners to recruit additional children with exceptional needs into their programs.
(C)(i)Any agency not meeting the applicable requirement described in subclauses (I) to (III), inclusive, of clause (ii) may be put on a conditional contract as described in Section 8314 unless they have applied and been approved for a waiver pursuant to clause (iii).
(ii)(I)On and after July 1, 2026, any agency not meeting the 5-percent requirement pursuant to subparagraph (A) of paragraph (1).
(II)On and after July 1, 2027, any agency not meeting the 7.5-percent requirement pursuant to subparagraph (B) of paragraph (1).
(III)On and after July 1, 2028, any agency not meeting the 10-percent requirement pursuant to subparagraph (C) of paragraph (1).
(iii)The Superintendent shall create an ongoing waiver process for an agency not able to meet the requirement described in paragraph (1).
(3)Children with exceptional needs attending California state preschool programs shall be educated in the least restrictive environment in accordance with Section 1412(a)(5)(A) of Title 20 of the United States Code.
(4)(A)Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, until regulations are filed with the Secretary of State to implement this subdivision, the department shall implement this subdivision through management bulletins or similar letters of instruction on or before December 31, 2022.
(B)The department shall initiate a rulemaking action to implement this subdivision on or before December 31, 2023.
(d)(1)A three- or four-year-old child is eligible for a full-day California state preschool program if the family meets both of the following requirements: all of the following requirements are met:
(A)The child is one of the following:
(i)A two-year-old child and the California state preschool program has chosen to enroll the two-year-old child in accordance with the guidance developed pursuant to Section 8207.1.
(ii)A three-year-old child.
(iii)A four-year-old child.
(A)(B)The childs family is one of the following:
(i)A current aid recipient.
(ii)Income eligible.
(iii)Homeless.
(iv)One whose children are recipients of child protective services, or whose children have been identified as being abused, neglected, or exploited, or at risk of being abused, neglected, or exploited.
(v)(I)One that has children with exceptional needs, as defined in Section 8205.
(II)Only the children in the family who are children with exceptional needs may be enrolled under the eligibility criteria of this clause. Any other child in the family without exceptional needs may be enrolled pursuant to any of the criteria established in clauses (i) to (iv), inclusive.
(vi)One who has a member of its household who is certified to receive benefits from Medi-Cal, CalFresh, the California Food Assistance Program, the California Special Supplemental Nutrition Program for Women, Infants, and Children, the federal Food Distribution Program on Indian Reservations, Head Start, Early Head Start, or any other designated means-tested government program, as determined by the department. Children eligible for services pursuant to this subparagraph shall be prioritized by the income declared on the application for the means-tested government program.
(B)(C)The childs family needs the childcare services because of either the following:
(i)The child has been identified by a legal, medical, or social services agency, a local educational agency liaison for homeless children and youths designated pursuant to Section 11432(g)(1)(J)(ii) of Title 42 of the United States Code, a Head Start program, or an emergency or transitional shelter as one of the following:
(I)A recipient of protective services.
(II)Being neglected, abused, or exploited, or at risk of neglect, abuse, or exploitation.
(III)Being homeless.
(ii)The childs parents are one of the following:
(I)Engaged in vocational training leading directly to a recognized trade, paraprofession, or profession.
(II)Engaged in an educational program for English language learners or to attain a high school diploma or general educational development certificate.
(III)Employed or seeking employment.
(IV)Seeking permanent housing for family stability.
(V)Incapacitated.
(2)(A)(i)Commencing July 1, 2022, until June 30, 2025, inclusive, at least 5 percent of a full-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205.
(ii)Commencing July 1, 2025, to June 30, 2026, inclusive, at least 7.5 percent of a full-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205.
(iii)Commencing July 1, 2026, at least 10 percent of a full-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205, and serve those children.
(B)(i)The department shall review data on compliance and provide technical assistance to California state preschool program contracting agencies to assist them in meeting the requirement described in subparagraph (A).
(ii)Agencies shall be fully funded for the percentage of enrollment specified in subparagraph (A), inclusive of the exceptional needs adjustment factor for that enrollment pursuant to Section 8244, to ensure funding is available to enroll children with exceptional needs within the set aside specified in subparagraph (A) at any point during the fiscal year. An agency not meeting the requirement to fill the percent of funded enrollment specified in subparagraph (A) with children with exceptional needs shall conduct community outreach to special education partners to recruit additional children with exceptional needs into their programs.
(iii)(I)Any agency not meeting the applicable requirement described in sub-subclauses (ia) to (ic), inclusive, of subclause (II) may be put on a conditional contract as described in Section 8314 unless they have applied and been approved for a waiver pursuant to subclause (III).
(II)(ia)On and after July 1, 2026, any agency not meeting the 5-percent requirement pursuant to clause (i) of subparagraph (A).
(ib)On and after July 1, 2027, any agency not meeting the 7.5-percent requirement pursuant to clause (ii) of subparagraph (A).
(ic)On and after July 1, 2028, any agency not meeting the 10-percent requirement pursuant to clause (iii) of subparagraph (A).
(III)The Superintendent shall create an ongoing waiver process for agencies not able to meet the requirement described in subparagraph (A).
(C)Children with exceptional needs attending California state preschool programs shall be educated in the least restrictive environment in accordance with Section 1412(a)(5)(A) of Title 20 of the United States Code.
(D)(i)Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, until regulations are filed with the Secretary of State to implement this paragraph, the department shall implement this paragraph through management bulletins or similar letters of instruction on or before December 31, 2022.
(ii)The department shall initiate a rulemaking action to implement this paragraph on or before December 31, 2023.
(3)Notwithstanding any other law, a full-day California state preschool program may provide services to children in families whose income is no more than 15 percent above the income eligibility threshold, as described in Section 8213, after all eligible three- two-, three-, and four-year-old children have been enrolled pursuant to paragraph (1). No more than 10 percent of children enrolled, as calculated throughout the participating programs entire contract, may be filled by children in families above the income eligibility threshold.
(4)Notwithstanding paragraph (1), after all families meeting the criteria specified in paragraphs (1) and (3) have been enrolled, a full-day California state preschool program may provide services to three- two-, three-, and four-year-old children in families who do not meet at least one of the criteria specified in subparagraph (B) of paragraph (1).
(5)After all otherwise eligible children have been enrolled as provided in paragraphs (1), (3), and (4), a provider operating a full-day California state preschool program within the attendance boundary of a public school as set forth in Section 8217 may enroll any three- two-, three-, or four-year-old child.
(e)(1)With the exception of the age requirements and paragraphs (3) and (4), upon establishing initial eligibility or ongoing eligibility for full-day California state preschool program services under this chapter, a family shall be considered to meet all eligibility and need requirements for those services for not less than 24 months, shall receive those services for not less than 24 months before having their eligibility or need recertified, and shall not be required to report changes to income or other changes for at least 24 months.
(2)In the event that the eligibility period as described in paragraph (1) ends before the end of a program year, eligibility shall be extended until the end of the program year, as long as applicable age-eligibility requirements are met, as specified in Section 8205.
(3)A family that establishes initial eligibility or ongoing eligibility on the basis of income shall report increases in income that exceed the threshold for ongoing income eligibility, as described in Section 8213, and the familys ongoing eligibility for services shall at that time be recertified.
(4)A family may, at any time, voluntarily report income or other changes. This information shall be used, as applicable, to reduce the familys fees, increase the familys services, or extend the period of the familys eligibility before recertification.
(f)(1)Because a family that meets eligibility requirements at its most recent eligibility certification or recertification is considered eligible until the next recertification, as provided in subdivision (d), a payment made by a preschool program for a child during this period shall not be considered an error or an improper payment due to a change in the familys circumstances during that same period.
(2)Notwithstanding paragraph (1), the Superintendent or the Superintendents designated agent may seek to recover payments that are the result of fraud.
(g)(1)Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, until regulations are filed with the Secretary of State to implement subdivision (e), the department shall implement subdivision (e) through management bulletins or similar letters of instruction on or before December 31, 2022.
(2)The department shall initiate a rulemaking action to implement subdivision (e) on or before December 31, 2023.
(h)The Superintendent shall establish guidelines according to which the director or a duly authorized representative of the California state preschool program will certify children as eligible for state reimbursement purposes.
(i)This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.
SEC. 8.Section 8208 is added to the Education Code, to read:8208.(a)(1)A three- or four-year-old child is eligible for the part-day California state preschool program if the childs family is one of the following:
(A)A current aid recipient.
(B)Income eligible.
(C)Homeless.
(D)One whose children are recipients of child protective services, or whose children have been identified as being abused, neglected, or exploited, or at risk of being abused, neglected, or exploited.
(E)(i)One that has children with exceptional needs, as defined in Section 8205.
(ii)Only the children in the family who are children with exceptional needs may be enrolled under the eligibility criteria of this subparagraph. Any other child in the family without exceptional needs may be enrolled pursuant to any of the criteria established in subparagraphs (A) to (D), inclusive.
(F)One who has a member of its household who is certified to receive benefits from Medi-Cal, CalFresh, the California Food Assistance Program, the California Special Supplemental Nutrition Program for Women, Infants, and Children, the federal Food Distribution Program on Indian Reservations, Head Start, Early Head Start, or any other designated means-tested government program, as determined by the department. Children eligible for services pursuant to this subparagraph shall be prioritized by the income declared on the application for the means-tested government program.
(2)Notwithstanding any other law, a part-day California state preschool program may provide services to children in families whose income is no more than 15 percent above the income eligibility threshold, as described in Section 8213, after all eligible three- and four-year-old children have been enrolled. No more than 10 percent of children enrolled, calculated throughout the participating programs entire contract, may be filled by children in families above the income eligibility threshold.
(3)Notwithstanding Section 8213, after all otherwise eligible children have been enrolled as provided in paragraphs (1) and (2), a part-day California state preschool program may provide services to three- and four-year-old children in families whose income is above the income eligibility threshold if those children are children with exceptional needs. Children receiving services pursuant to this paragraph shall not count towards the 10-percent limit in paragraph (2).
(4)Notwithstanding any other law, after all otherwise eligible children have been enrolled as provided in paragraphs (1) to (3), inclusive, a provider operating a part-day state preschool program within the attendance boundary of a public school, as set forth in Section 8217, may enroll three- and four-year-old children.
(b)A part-day California state preschool program contracting agency shall certify eligibility and enroll families into their program within 120 calendar days prior to the first day of the beginning of the new preschool year. Subsequent to enrollment, a child shall be deemed eligible for a part-day California state preschool program for the remainder of the program year and for the following program year, as long as applicable age-eligibility requirements are met, as specified in Sections 8205 and 48000.
(c)(1)(A)Commencing July 1, 2022, until June 30, 2025, inclusive, at least 5 percent of a part-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205.
(B)Commencing July 1, 2025, to June 30, 2026, inclusive, at least 7.5 percent of a part-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205.
(C)Commencing July 1, 2026, at least 10 percent of a part-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205, and serve those children.
(2)(A)The department shall review data on compliance and provide technical assistance to California state preschool program contracting agencies to assist them in meeting the requirement described in paragraph (1).
(B)Agencies shall be fully funded for the percentage of enrollment specified in paragraph (1), inclusive of the exceptional needs adjustment factor for that enrollment pursuant to Section 8244, to ensure funding is available to enroll children with exceptional needs within the set aside specified in paragraph (1) at any point during the fiscal year. An agency not meeting the requirement to fill the percent of funded enrollment specified in paragraph (1) with children with exceptional needs shall conduct community outreach to special education partners to recruit additional children with exceptional needs into their programs.
(C)(i)Any agency not meeting the applicable requirement described in subclauses (I) to (III), inclusive, of clause (ii) may be put on a conditional contract as described in Section 8314 unless they have applied and been approved for a waiver pursuant to clause (iii).
(ii)(I)On and after July 1, 2026, any agency not meeting the 5-percent requirement pursuant to subparagraph (A) of paragraph (1).
(II)On and after July 1, 2027, any agency not meeting the 7.5-percent requirement pursuant to subparagraph (B) of paragraph (1).
(III)On and after July 1, 2028, any agency not meeting the 10-percent requirement pursuant to subparagraph (C) of paragraph (1).
(iii)The Superintendent shall create an ongoing waiver process for an agency not able to meet the requirement described in paragraph (1).
(3)Children with exceptional needs attending California state preschool programs shall be educated in the least restrictive environment in accordance with Section 1412(a)(5)(A) of Title 20 of the United States Code.
(4)(A)Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, until regulations are filed with the Secretary of State to implement this subdivision, the department shall implement this subdivision through management bulletins or similar letters of instruction on or before December 31, 2022.
(B)The department shall initiate a rulemaking action to implement this subdivision on or before December 31, 2023.
(d)(1)A three- or four-year-old child is eligible for a full-day California state preschool program if the family meets both of the following requirements:
(A)The childs family is one of the following:
(i)A current aid recipient.
(ii)Income eligible.
(iii)Homeless.
(iv)One whose children are recipients of child protective services, or whose children have been identified as being abused, neglected, or exploited, or at risk of being abused, neglected, or exploited.
(v)(I)One that has children with exceptional needs, as defined in Section 8205.
(II)Only the children in the family who are children with exceptional needs may be enrolled under the eligibility criteria of this clause. Any other child in the family without exceptional needs may be enrolled pursuant to any of the criteria established in clauses (i) to (iv), inclusive.
(vi)One who has a member of its household who is certified to receive benefits from Medi-Cal, CalFresh, the California Food Assistance Program, the California Special Supplemental Nutrition Program for Women, Infants, and Children, the federal Food Distribution Program on Indian Reservations, Head Start, Early Head Start, or any other designated means-tested government program, as determined by the department. Children eligible for services pursuant to this subparagraph shall be prioritized by the income declared on the application for the means-tested government program.
(B)The childs family needs the childcare services because of either the following:
(i)The child has been identified by a legal, medical, or social services agency, a local educational agency liaison for homeless children and youths designated pursuant to Section 11432(g)(1)(J)(ii) of Title 42 of the United States Code, a Head Start program, or an emergency or transitional shelter as one of the following:
(I)A recipient of protective services.
(II)Being neglected, abused, or exploited, or at risk of neglect, abuse, or exploitation.
(III)Being homeless.
(ii)The childs parents are one of the following:
(I)Engaged in vocational training leading directly to a recognized trade, paraprofession, or profession.
(II)Engaged in an educational program for English language learners or to attain a high school diploma or general educational development certificate.
(III)Employed or seeking employment.
(IV)Seeking permanent housing for family stability.
(V)Incapacitated.
(2)(A)(i)Commencing July 1, 2022, until June 30, 2025, inclusive, at least 5 percent of a full-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205.
(ii)Commencing July 1, 2025, to June 30, 2026, inclusive, at least 7.5 percent of a full-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205.
(iii)Commencing July 1, 2026, at least 10 percent of a full-day California state preschool program contracting agencys funded enrollment shall be reserved for children with exceptional needs, as defined in Section 8205, and serve those children.
(B)(i)The department shall review data on compliance and provide technical assistance to California state preschool program contracting agencies to assist them in meeting the requirement described in subparagraph (A).
(ii)Agencies shall be fully funded for the percentage of enrollment specified in subparagraph (A), inclusive of the exceptional needs adjustment factor for that enrollment pursuant to Section 8244, to ensure funding is available to enroll children with exceptional needs within the set aside specified in subparagraph (A) at any point during the fiscal year. An agency not meeting the requirement to fill the percent of funded enrollment specified in subparagraph (A) with children with exceptional needs shall conduct community outreach to special education partners to recruit additional children with exceptional needs into their programs.
(iii)(I)Any agency not meeting the applicable requirement described in sub-subclauses (ia) to (ic), inclusive, of subclause (II) may be put on a conditional contract as described in Section 8314 unless they have applied and been approved for a waiver pursuant to subclause (III).
(II)(ia)On and after July 1, 2026, any agency not meeting the 5-percent requirement pursuant to clause (i) of subparagraph (A).
(ib)On and after July 1, 2027, any agency not meeting the 7.5-percent requirement pursuant to clause (ii) of subparagraph (A).
(ic)On and after July 1, 2028, any agency not meeting the 10-percent requirement pursuant to clause (iii) of subparagraph (A).
(III)The Superintendent shall create an ongoing waiver process for agencies not able to meet the requirement described in subparagraph (A).
(C)Children with exceptional needs attending California state preschool programs shall be educated in the least restrictive environment in accordance with Section 1412(a)(5)(A) of Title 20 of the United States Code.
(D)(i)Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, until regulations are filed with the Secretary of State to implement this paragraph, the department shall implement this paragraph through management bulletins or similar letters of instruction on or before December 31, 2022.
(ii)The department shall initiate a rulemaking action to implement this paragraph on or before December 31, 2023.
(3)Notwithstanding any other law, a full-day California state preschool program may provide services to children in families whose income is no more than 15 percent above the income eligibility threshold, as described in Section 8213, after all eligible three- and four-year-old children have been enrolled pursuant to paragraph (1). No more than 10 percent of children enrolled, as calculated throughout the participating programs entire contract, may be filled by children in families above the income eligibility threshold.
(4)Notwithstanding paragraph (1), after all families meeting the criteria specified in paragraphs (1) and (3) have been enrolled, a full-day California state preschool program may provide services to three- and four-year-old children in families who do not meet at least one of the criteria specified in subparagraph (B) of paragraph (1).
(5)After all otherwise eligible children have been enrolled as provided in paragraphs (1), (3), and (4), a provider operating a full-day California state preschool program within the attendance boundary of a public school as set forth in Section 8217 may enroll any three- or four-year-old child.
(e)(1)With the exception of the age requirements and paragraphs (3) and (4), upon establishing initial eligibility or ongoing eligibility for full-day California state preschool program services under this chapter, a family shall be considered to meet all eligibility and need requirements for those services for not less than 24 months, shall receive those services for not less than 24 months before having their eligibility or need recertified, and shall not be required to report changes to income or other changes for at least 24 months.
(2)In the event that the eligibility period as described in paragraph (1) ends before the end of a program year, eligibility shall be extended until the end of the program year, as long as applicable age-eligibility requirements are met, as specified in Section 8205.
(3)A family that establishes initial eligibility or ongoing eligibility on the basis of income shall report increases in income that exceed the threshold for ongoing income eligibility, as described in Section 8213, and the familys ongoing eligibility for services shall at that time be recertified.
(4)A family may, at any time, voluntarily report income or other changes. This information shall be used, as applicable, to reduce the familys fees, increase the familys services, or extend the period of the familys eligibility before recertification.
(f)(1)Because a family that meets eligibility requirements at its most recent eligibility certification or recertification is considered eligible until the next recertification, as provided in subdivision (d), a payment made by a preschool program for a child during this period shall not be considered an error or an improper payment due to a change in the familys circumstances during that same period.
(2)Notwithstanding paragraph (1), the Superintendent or the Superintendents designated agent may seek to recover payments that are the result of fraud.
(g)(1)Notwithstanding the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code) and Section 33308.5, until regulations are filed with the Secretary of State to implement subdivision (e), the department shall implement subdivision (e) through management bulletins or similar letters of instruction on or before December 31, 2022.
(2)The department shall initiate a rulemaking action to implement subdivision (e) on or before December 31, 2023.
(h)The Superintendent shall establish guidelines according to which the director or a duly authorized representative of the California state preschool program will certify children as eligible for state reimbursement purposes.
(i)This section shall become operative on July 1, 2027.
SEC. 9.Section 8210 of the Education Code is amended to read:8210.(a)Each applicant or contracting agency shall give priority for part-day programs according to the following:
(1)The first priority for services shall be given to three-year-old two-year-old, three-year-old, or four-year-old children who are recipients of child protective services or who are at risk of being neglected, abused, or exploited and for whom there is a written referral from a legal, medical, or social service agency. If an agency is unable to enroll a child in this first priority category, the agency shall refer the childs parent or guardian to local resources and referral services so that services for the child can be located.
(2)(A)To the extent that there are additional three- two-, three-, and four-year-old children with exceptional needs interested in enrolling beyond those already enrolled in the percent of funded enrollment set aside pursuant to Section 8208, the second priority for services shall be given to all three- and four-year-old children with exceptional needs from families with incomes below the income eligibility threshold, as described in Section 8213.
(B)Within this priority category, children with exceptional needs from families with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(3)(A)The third priority for services shall be given to eligible three-year-old two-year-old, three-year-old, or four-year-old children who are not enrolled in a state-funded transitional kindergarten program. This priority shall not include children eligible pursuant to subparagraph (E) of paragraph (1) of subdivision (a) of Section 8208 if they are from families with incomes above the income eligibility threshold, as described in Section 8213.
(B)(i)Within this priority category, eligible children with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(ii)If two or more families have the same income ranking according to the most recent schedule of income ceiling eligibility table, a child who is identified as a dual language learner shall be enrolled first.
(iii)If there are no children who are identified as dual language learners, the child that has been on the waiting list for the longest time shall be admitted first.
(4)The fourth priority, after all otherwise eligible children have been enrolled, shall be children from families whose income is no more than 15 percent above the eligibility income threshold, as described in Section 8213. Within this priority category, priority shall be given to three- two-, three-, and four-year-old children with exceptional needs interested in enrolling beyond those already enrolled in the 10 percent of funded enrollment set aside pursuant to Section 8208, then to four-year-old children before two-year-old and three-year-old children without exceptional needs.
(5)After all otherwise eligible children have been enrolled in the first through fourth priority categories, as described in paragraphs (1) to (4), inclusive, the contractor may enroll the children in the following order:
(A)A California preschool program site operating within the attendance boundaries of a qualified free and reduced priced meals school, in accordance with Section 8217, may enroll any three- two-, three-, or four-year-old children whose families reside within the attendance boundary of the qualified elementary school. These children shall, to the extent possible, be enrolled by lowest to highest income according to the most recent schedule of income ceiling eligibility table.
(B)Children enrolling in the California state preschool program to provide expanded learning and care to transitional kindergarten or kindergarten pupils, pursuant to subdivision (l) of Section 48000.
(b)The Superintendent shall set criteria for, and may grant specific waivers of, the priorities established in this section for agencies that wish to serve specific populations, including children with exceptional needs or children of prisoners. These new waivers shall not include proposals to avoid appropriate fee schedules or admit ineligible families, but may include proposals to accept members of special populations in other than strict income order, as long as appropriate fees are paid.
(c)(1)Children with exceptional needs enrolled in the percent of funded enrollment set aside pursuant to paragraph (1) of subdivision (c) of Section 8208 shall be enrolled without regard to the priorities listed in subdivision (a).
(2)Within this category, eligible children with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(3)If two or more families have the same income ranking according to the most recent schedule of income ceiling eligibility table, the child that has been on the waiting list for the longest time shall be admitted first.
(d)This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.
SEC. 10.Section 8210 is added to the Education Code, to read:8210.(a)Each applicant or contracting agency shall give priority for part-day programs according to the following:
(1)The first priority for services shall be given to three-year-old or four-year-old children who are recipients of child protective services or who are at risk of being neglected, abused, or exploited and for whom there is a written referral from a legal, medical, or social service agency. If an agency is unable to enroll a child in this first priority category, the agency shall refer the childs parent or guardian to local resources and referral services so that services for the child can be located.
(2)(A)To the extent that there are additional three- and four-year-old children with exceptional needs interested in enrolling beyond those already enrolled in the percent of funded enrollment set aside pursuant to Section 8208, the second priority for services shall be given to all three- and four-year-old children with exceptional needs from families with incomes below the income eligibility threshold, as described in Section 8213.
(B)Within this priority category, children with exceptional needs from families with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(3)(A)The third priority for services shall be given to eligible three-year-old or four-year-old children who are not enrolled in a state-funded transitional kindergarten program. This priority shall not include children eligible pursuant to subparagraph (E) of paragraph (1) of subdivision (a) of Section 8208 if they are from families with incomes above the income eligibility threshold, as described in Section 8213.
(B)(i)Within this priority category, eligible children with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(ii)If two or more families have the same income ranking according to the most recent schedule of income ceiling eligibility table, a child who is identified as a dual language learner shall be enrolled first.
(iii)If there are no children who are identified as dual language learners, the child that has been on the waiting list for the longest time shall be admitted first.
(4)The fourth priority, after all otherwise eligible children have been enrolled, shall be children from families whose income is no more than 15 percent above the eligibility income threshold, as described in Section 8213. Within this priority category, priority shall be given to three- and four-year-old children with exceptional needs interested in enrolling beyond those already enrolled in the 10 percent of funded enrollment set aside pursuant to Section 8208, then to four-year-old children before three-year-old children without exceptional needs.
(5)After all otherwise eligible children have been enrolled in the first through fourth priority categories, as described in paragraphs (1) to (4), inclusive, the contractor may enroll the children in the following order:
(A)A California preschool program site operating within the attendance boundaries of a qualified free and reduced priced meals school, in accordance with Section 8217, may enroll any three- or four-year-old children whose families reside within the attendance boundary of the qualified elementary school. These children shall, to the extent possible, be enrolled by lowest to highest income according to the most recent schedule of income ceiling eligibility table.
(B)Children enrolling in the California state preschool program to provide expanded learning and care to transitional kindergarten or kindergarten pupils, pursuant to subdivision (l) of Section 48000.
(b)The Superintendent shall set criteria for, and may grant specific waivers of, the priorities established in this section for agencies that wish to serve specific populations, including children with exceptional needs or children of prisoners. These new waivers shall not include proposals to avoid appropriate fee schedules or admit ineligible families, but may include proposals to accept members of special populations in other than strict income order, as long as appropriate fees are paid.
(c)(1)Children with exceptional needs enrolled in the percent of funded enrollment set aside pursuant to paragraph (1) of subdivision (c) of Section 8208 shall be enrolled without regard to the priorities listed in subdivision (a).
(2)Within this category, eligible children with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(3)If two or more families have the same income ranking according to the most recent schedule of income ceiling eligibility table, the child that has been on the waiting list for the longest time shall be admitted first.
(d)This section shall become operative on July 1, 2027.
SEC. 11.Section 8211 of the Education Code is amended to read:8211.(a)Each applicant or contracting agency shall give priority for full-day programs according to the following:
(1)The first priority for services shall be given to three-year-old two-year-old, three-year-old, or four-year-old children who are recipients of child protective services or who are at risk of being neglected, abused, or exploited upon written referral from a legal, medical, or social service agency. If an agency is unable to enroll a child in this first priority category, the agency shall refer the childs parent or guardian to local resources and referral services so that services for the child can be located.
(2)(A)To the extent that there are additional three- two-, three-, and four-year-old children with exceptional needs interested in enrolling beyond those already enrolled in the percent of funded enrollment set aside pursuant to paragraph (1) of subdivision (c) of Section 8208, the second priority for services shall be given to all three- and four-year-old children with exceptional needs from families with incomes below the income eligibility threshold, described in Section 8213.
(B)Within this priority category, children with exceptional needs from families with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(3)(A)The third priority for services shall be given to eligible three-year-old two-year-old, three-year-old, or four-year-old children who are not enrolled in a state-funded transitional kindergarten program. This priority shall not include children eligible pursuant to subparagraph (E) of paragraph (1) of subdivision (a) of Section 8208 if they are from families with incomes above the income eligibility threshold, as described in Section 8213.
(B)(i)Within this priority category, eligible children with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(ii)If two or more families have the same income ranking according to the most recent schedule of income ceiling eligibility table, a child who is identified as a dual language learner shall be enrolled first.
(iii)If there are no children who are identified as dual language learners, the child that has been on the waiting list for the longest time shall be admitted first.
(4)The fourth priority, after all otherwise eligible children have been enrolled, shall be children from families whose income is no more than 15 percent above the income eligibility threshold, as described in Section 8213. Within this priority category, priority shall be given to three- two-, three-, and four-year-old children with an individualized family service plan or individualized education program, then four-year-old children before two-year-old and three-year-old children without an individualized family service plan or individualized education program.
(5)After all otherwise eligible children have been enrolled in the first through fourth priority categories, as described in paragraphs (1) to (4), inclusive, the contractor may enroll the children in the following order:
(A)The contractor may enroll three- two-, three-, and four-year-old children from families that meet eligibility criteria pursuant to paragraph (4) of subdivision (d) of Section 8208. Within this priority, contractors shall enroll families in income ranking order, lowest to highest, and within income ranking order, enroll four-year-old children before three-year-old children.
(B)For California state preschool program sites operating within the attendance boundaries of a qualified free and reduced priced meals school, in accordance with Section 8217, the contractor may enroll any three- and four-year-old children whose families reside within the attendance boundary of the qualified school without establishing eligibility or a need for services pursuant to paragraph (1) or (3) of subdivision (d) of Section 8208. These families shall, to the extent possible, be enrolled in income ranking order, by lowest to highest income according to the most recent schedule of income ceiling eligibility table.
(b)The Superintendent shall set criteria for, and may grant specific waivers of, the priorities established in this section for agencies that wish to serve specific populations, including children with exceptional needs or children of prisoners. These new waivers shall not include proposals to avoid appropriate fee schedules or admit ineligible families, but may include proposals to accept members of special populations in other than strict income order, as long as appropriate fees are paid.
(c)(1)Children with exceptional needs enrolled in the percent of funded enrollment set aside pursuant to paragraph (1) of subdivision (c) of Section 8208 shall be enrolled without regard to the priorities listed in subdivision (a).
(2)Within this category, eligible children with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(3)If two or more families have the same income ranking according to the most recent schedule of income ceiling eligibility table, the child that has been on the waiting list for the longest time shall be admitted first.
(d)This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.
SEC. 12.Section 8211 is added to the Education Code, to read:8211.(a)Each applicant or contracting agency shall give priority for full-day programs according to the following:
(1)The first priority for services shall be given to three-year-old or four-year-old children who are recipients of child protective services or who are at risk of being neglected, abused, or exploited upon written referral from a legal, medical, or social service agency. If an agency is unable to enroll a child in this first priority category, the agency shall refer the childs parent or guardian to local resources and referral services so that services for the child can be located.
(2)(A)To the extent that there are additional three- and four-year-old children with exceptional needs interested in enrolling beyond those already enrolled in the percent of funded enrollment set aside pursuant to paragraph (1) of subdivision (c) of Section 8208, the second priority for services shall be given to all three- and four-year-old children with exceptional needs from families with incomes below the income eligibility threshold, described in Section 8213.
(B)Within this priority category, children with exceptional needs from families with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(3)(A)The third priority for services shall be given to eligible three-year-old or four-year-old children who are not enrolled in a state-funded transitional kindergarten program. This priority shall not include children eligible pursuant to subparagraph (E) of paragraph (1) of subdivision (a) of Section 8208 if they are from families with incomes above the income eligibility threshold, as described in Section 8213.
(B)(i)Within this priority category, eligible children with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(ii)If two or more families have the same income ranking according to the most recent schedule of income ceiling eligibility table, a child who is identified as a dual language learner shall be enrolled first.
(iii)If there are no children who are identified as dual language learners, the child that has been on the waiting list for the longest time shall be admitted first.
(4)The fourth priority, after all otherwise eligible children have been enrolled, shall be children from families whose income is no more than 15 percent above the income eligibility threshold, as described in Section 8213. Within this priority category, priority shall be given to three- and four-year-old children with an individualized family service plan or individualized education program, then four-year-old children before three-year-old children without an individualized family service plan or individualized education program.
(5)After all otherwise eligible children have been enrolled in the first through fourth priority categories, as described in paragraphs (1) to (4), inclusive, the contractor may enroll the children in the following order:
(A)The contractor may enroll three- and four-year-old children from families that meet eligibility criteria pursuant to paragraph (4) of subdivision (d) of Section 8208. Within this priority, contractors shall enroll families in income ranking order, lowest to highest, and within income ranking order, enroll four-year-old children before three-year-old children.
(B)For California state preschool program sites operating within the attendance boundaries of a qualified free and reduced priced meals school, in accordance with Section 8217, the contractor may enroll any three- and four-year-old children whose families reside within the attendance boundary of the qualified school without establishing eligibility or a need for services pursuant to paragraph (1) or (3) of subdivision (d) of Section 8208. These families shall, to the extent possible, be enrolled in income ranking order, by lowest to highest income according to the most recent schedule of income ceiling eligibility table.
(b)The Superintendent shall set criteria for, and may grant specific waivers of, the priorities established in this section for agencies that wish to serve specific populations, including children with exceptional needs or children of prisoners. These new waivers shall not include proposals to avoid appropriate fee schedules or admit ineligible families, but may include proposals to accept members of special populations in other than strict income order, as long as appropriate fees are paid.
(c)(1)Children with exceptional needs enrolled in the percent of funded enrollment set aside pursuant to paragraph (1) of subdivision (c) of Section 8208 shall be enrolled without regard to the priorities listed in subdivision (a).
(2)Within this category, eligible children with the lowest income according to the income ranking on the most recent schedule of income ceiling eligibility table, as published by the Superintendent at the time of enrollment, shall be enrolled first.
(3)If two or more families have the same income ranking according to the most recent schedule of income ceiling eligibility table, the child that has been on the waiting list for the longest time shall be admitted first.
(d)This section shall become operative on July 1, 2027.
SEC. 13.Section 8244 of the Education Code is amended to read:8244.(a)In order to reflect the additional expense of serving full-day preschool children who meet any of the criteria outlined in subdivision (b), the contractors reported child days of enrollment for these children shall be multiplied by the adjustment factors listed below.
(b)Notwithstanding any other law, the adjustment factors shall be as follows:
(1)For children with exceptional needs, including children with severe disabilities, the adjustment factor shall be 2.40.
(2)For children at risk of neglect, abuse, or exploitation, the adjustment factor shall be 1.1.
(3)For dual language learner children, the adjustment factor shall be 1.2.
(4)When early childhood mental health consultation services are provided, pursuant to Section 8243, the adjustment factor shall be 1.1.
(5)(A)For children 47 months or younger, two-year-old and three-year old children, the adjustment factor shall be 1.8.
(B)Notwithstanding subparagraph (A), for two-year-old children, the department shall ensure that the rate that contractors receive in each county for each setting and time base type is no less than the rate provided for children of the same age served in general child care and development programs pursuant to Chapter 7 (commencing with Section 10240) of Part 1.8 of Division 9 of the Welfare and Institutions Code.
(c)In order to reflect the additional expense of serving part-day preschool children, the contractors reported child days of enrollment for children meeting the criteria in paragraph (1), (4), or (5) of subdivision (b) shall be multiplied by the adjustment factors in those subdivisions.
(d)Use of the adjustment factors shall not increase the contractors total annual allocation.
(e)(1)Days of enrollment for children who meet more than one of the criteria outlined in paragraphs (1) to (3), inclusive, and (5) of subdivision (b) shall not be reported under more than one of the categories specified in those paragraphs.
(2)Notwithstanding paragraph (1), for children for whom an adjustment factor is applied pursuant to any of paragraphs (1) to (3), inclusive, and (5) of subdivision (b), and who are additionally eligible for the adjustment factor established in paragraph (4) of subdivision (b), reported child days of enrollment shall be multiplied by the sum of the applicable adjustment factor under paragraphs (1) to (3), inclusive, and (5) of subdivision (b) and 0.1.
(f)The difference between the reimbursement resulting from the use of the adjustment factors outlined in subdivision (b) and the reimbursement that would otherwise be received by a provider in the absence of the adjustment factors shall be used for special and appropriate services for each child for whom an adjustment factor is claimed.
(g)This section shall become inoperative on July 1, 2027, and, as of January 1, 2028, is repealed.
SEC. 14.Section 8244 is added to the Education Code, to read:8244.(a)In order to reflect the additional expense of serving full-day preschool children who meet any of the criteria outlined in subdivision (b), the contractors reported child days of enrollment for these children shall be multiplied by the adjustment factors listed below.
(b)Notwithstanding any other law, the adjustment factors shall be as follows:
(1)For children with exceptional needs, including children with severe disabilities, the adjustment factor shall be 2.40.
(2)For children at risk of neglect, abuse, or exploitation, the adjustment factor shall be 1.1.
(3)For dual language learner children, the adjustment factor shall be 1.2.
(4)When early childhood mental health consultation services are provided, pursuant to Section 8243, the adjustment factor shall be 1.1.
(5)For children 47 months or younger, the adjustment factor shall be 1.8.
(c)In order to reflect the additional expense of serving part-day preschool children, the contractors reported child days of enrollment for children meeting the criteria in paragraph (1), (4), or (5) of subdivision (b) shall be multiplied by the adjustment factors in those subdivisions.
(d)Use of the adjustment factors shall not increase the contractors total annual allocation.
(e)(1)Days of enrollment for children who meet more than one of the criteria outlined in paragraphs (1) to (3), inclusive, and (5) of subdivision (b) shall not be reported under more than one of the categories specified in those paragraphs.
(2)Notwithstanding paragraph (1), for children for whom an adjustment factor is applied pursuant to any of paragraphs (1) to (3), inclusive, and (5) of subdivision (b), and who are additionally eligible for the adjustment factor established in paragraph (4) of subdivision (b), reported child days of enrollment shall be multiplied by the sum of the applicable adjustment factor under paragraphs (1) to (3), inclusive, and (5) of subdivision (b) and 0.1.
(f)The difference between the reimbursement resulting from the use of the adjustment factors outlined in subdivision (b) and the reimbursement that would otherwise be received by a provider in the absence of the adjustment factors shall be used for special and appropriate services for each child for whom an adjustment factor is claimed.
(g)This section shall become operative on July 1, 2027.
SECTION 1.The Legislature finds and declares all of the following:(a)The Legislature, through the passage of Assembly Bill 131 in 2021, required the State Department of Social Services, in consultation with the State Department of Education, to convene and create the Rate and Quality Workgroup to assess the methodology for establishing subsidy payment rates for childcare and development and preschool programs and to make related recommendations. (b)The workgroup submitted two reports to the Legislature recommending that the state create a single subsidy payment rate structure that addresses quality standards for equity and accessibility while supporting positive learning and developmental outcomes for children.(c)It is the intent of the Legislature that this act implements the recommendations of the workgroup to create a new subsidy payment rate structure for childcare and development and preschool programs.SEC. 2.Section 8242 of the Education Code is amended to read:8242.(a)The department, in collaboration with the State Department of Social Services, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.(1)Parent fees shall be used to pay reasonable and necessary costs for providing additional services.(2)The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.(b)(1)(A)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand nine hundred sixty-eight dollars ($12,968).(B)Commencing July 1, 2021, the standard reimbursement rate for part-day California state preschool programs shall be five thousand six hundred twenty-one dollars ($5,621).(2)Commencing in the 202223 fiscal year, the standard reimbursement rates described in paragraph (1) shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15.(c)(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:(A)The 75th percentile of the 2018 regional market rate survey.(B)The contract per-child reimbursement amount as of December 31, 2021, as increased by the cost-of-living adjustment pursuant to paragraph (2) of subdivision (b).(2)Commencing July 1, 2022, subject to available funding, the department may issue temporary rate increases to contractors that exceed the rates specified in paragraph (1) and the reimbursement rate supplements described in Section 51 of Chapter 571 of the Statutes of 2022.(3)In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and the information shall include, but not be limited to, all of the following:(A)Address, including ZIP Code.(B)Race and ethnicity.(C)Gender.(D)Whether the provider is open and available to provide childcare services or closed due to the COVID-19 public health emergency.(E)What types of federal relief funds have been received from the state.(F)Use of federal relief funds received.(G)Documentation that the provider met certifications as required by federal law.(4)Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.(d)This section shall become inoperative on the date the department notifies the Legislature in writing that the department has adopted the alternative methodology described in subdivision (d) of Section 10280 of the Welfare and Institutions Code, as amended by the act that added this subdivision, and, as of January 1 of the following year, is repealed. SEC. 3.Section 8242 is added to the Education Code, to read:8242.(a)The department, in collaboration with the State Department of Social Services, shall implement the alternative methodology for calculating subsidy payment rates for California state preschool program services provided under this chapter.(b)If necessary, the department, in collaboration with the State Department of Social Services, shall implement an interim transition plan to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Commencing in the 202728 fiscal year, the department shall fully implement the alternative methodology no sooner than 30 days after notification in writing to the chairperson of the Joint Legislative Budget Committee, or not sooner than whatever lesser time the chairperson of the joint committee, or their designee, determines is appropriate. (c)This section shall become operative on the date the department notifies the Legislature in writing that the department has adopted the alternative methodology described in Section 10280 of the Welfare and Institutions Code, as added by the act that added this section.SEC. 4.Section 8245.5 of the Education Code is amended to read:8245.5.(a)Notwithstanding any other law, contracting agencies operating a California state preschool program shall be reimbursed 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less, pursuant to guidance released by the Superintendent.(b)Notwithstanding any other law, reimbursement for full-day and part-day California state preschool family childcare home education network providers shall be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance.SEC. 5.Section 8252 of the Education Code is amended to read:8252.(a)The Superintendent shall use the fee schedule developed in conjunction with the State Department of Social Services for families using full-day preschool services pursuant to this chapter, including families receiving services pursuant to subdivision (a) of Section 8211.(b)Families shall be assessed a single flat monthly fee for all state subsidized early childhood services received, including California state preschool program services and services received through childcare and development programs administered by the State Department of Social Services, pursuant to Section 10290 of the Welfare and Institutions Code.(c)The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code shall not be included in total countable income for purposes of determining the amount of the family fee.(d)Family fees shall be assessed at initial enrollment and reassessed at recertification.(e)Family fees shall be used by contractors to pay reasonable and necessary costs for providing additional services.(f)It is the intent of the Legislature that the new family fees shall be cost neutral to the state and generate roughly the same amount of revenue as was generated under the previous family fee schedule.(g)Notwithstanding any other provision of this article, family fees shall not be collected for the 202122 fiscal year pursuant to Section 263 of the act that added this subdivision.(h)(1)Notwithstanding any other law, family fees shall not be collected for the 202223 fiscal year.(2)Contractors shall reimburse providers operating within a family childcare home education network for the full amount of the certificate or voucher without deducting family fees.(i)(1)Notwithstanding any other law, family fees shall not be collected between July 1, 2023, and September 30, 2023, inclusive.(2)Contractors shall reimburse providers operating within a family childcare home education network for the full amount of the certificate or voucher without deducting family fees.(j)Notwithstanding any other law, family fees shall not be collected until the new equitable sliding scale is established and implemented pursuant to Section 10290 of the Welfare and Institutions Code.SEC. 6.Section 10227.5 of the Welfare and Institutions Code is amended to read:10227.5.(a)Childcare providers authorized to provide services pursuant to this chapter shall submit to the alternative payment program a monthly attendance record or invoice for each child who received services that, at a minimum, documents the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day. The information shall be documented on a daily basis.(b)The monthly attendance record or invoice shall, at a minimum, be signed by the parent or guardian of the child receiving services and the childcare provider once per month to attest that the childs attendance is accurately reflected. The verification of attendance shall be made by signature at the end of each month of care and under penalty of perjury by both the parent or guardian of the child receiving services and the childcare provider.(c)The monthly attendance record or invoice shall be maintained by the childcare provider in the unaltered original format in which it was created, which may be in paper form or electronic format.(d)The alternative payment program shall accept the monthly attendance record or invoice as documentation of the hours of care provided if the attendance record or invoice includes adequate information documented on a daily basis, including, at a minimum, the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day. Reimbursement for childcare providers, including license-exempt providers, shall be based on the maximum certified hours of care, regardless of attendance, as follows:(1)Providers shall be reimbursed based on the maximum certified hours of care.(2)For families certified for a variable schedule, providers shall be reimbursed based on the maximum certified hours of care.(3)For license-exempt providers that provide part-time services, providers shall be reimbursed based on the maximum certified hours of care.(e)For purposes of reimbursement to providers through an alternative payment program, contractors shall not be required to track absences.(f)For purposes of this section, a monthly attendance record or invoice is defined as documentation that includes, at a minimum, the name of the child receiving services, the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day, that is signed under penalty of perjury by both the parent or guardian and the childcare provider, attesting that the information provided is accurate.(g)Contracting agencies operating a general childcare and development program pursuant to Chapter 7 (commencing with Section 10240) of this part, also known as a General Child Care Program, shall be reimbursed 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less. SEC. 7.Section 10280 of the Welfare and Institutions Code is amended to read:10280.(a)The department, in collaboration with the State Department of Education, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.(1)Parent fees shall be used to pay reasonable and necessary costs for providing additional services.(2)When establishing standards and assigned reimbursement rates, the department and the State Department of Education shall confer with applicant agencies.(3)The reimbursement system, including standards and rates, shall be submitted to the Joint Legislative Budget Committee.(4)The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.(b)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand eight hundred eighty-eight dollars ($12,888) and, commencing with the 202223 fiscal year, shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15 of the Education Code.(c)(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:(A)The 75th percentile of the 2018 regional market rate survey.(B)The contract per-child reimbursement amount as of December 31, 2021.(2)(A)Commencing July 1, 2022, subject to available funding, the department may issue temporary rate increases to contractors that exceed the rates specified in paragraph (1). The department shall have discretion in determining how funding may be used to increase the rates, including, but not limited to, providing one-time lump-sum payments. The department may contract with another entity to distribute this funding to contractors.(B)Notwithstanding any other law, contracts or grants awarded pursuant to this subparagraph shall be exempt from the personal services contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, the Public Contract Code, and the State Contracting Manual, and shall not be subject to review or approval of the Department of General Services.(3)In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and information shall include, but not be limited to, all of the following:(A)Address, including ZIP Code.(B)Race and ethnicity.(C)Gender.(D)Whether the provider is open and available to provide childcare services or closed due to the COVID-19 public health emergency.(E)What types of federal relief funds have been received from the state.(F)Use of federal relief funds received.(G)Documentation that the provider met certifications as required by federal law.(4)Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.(d)(1)The department, in collaboration with the State Department of Education, shall develop an alternative methodology for calculating subsidy payment rates for services provided under this part and California state preschool program services administered by the State Department of Education, in accordance with both of the following:(A)The alternative methodology shall build on the recommendations of the working group established pursuant to Section 10280.2, and shall be aligned with the recommendations of the Joint Labor Management Committee established pursuant to Section 10280.2.(B)The alternative methodology shall use a cost estimation model that includes all of the following:(i)Program models will meet the current statutory and regulatory requirements for each program.(ii)Staff salaries and benefits.(iii)Training and professional development.(iv)Curricula and supplies.(v)Group size and ratios.(vi)Enrollment levels.(vii)Facilities and other costs.(viii)Family engagement.(2)If necessary, the department, in collaboration with the State Department of Education, shall develop an interim transition plan to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Commencing in the 202728 fiscal year, the department shall fully implement the alternative methodology, no sooner than 30 days after notification in writing to the chairperson of the Joint Legislative Budget Committee, or not sooner than whatever lesser time the chairperson of the joint committee, or their designee, determines is appropriate. (3)Any funding provided in the Budget Act of 2023 to increase reimbursement rates shall be distributed using the interim transition plan described in paragraph (2), if that plan has been developed, until the alternative methodology described in paragraph (1) is adopted.(4)Funding and subsidy payments shall be based on enrollment of certified children with the contract rates set using the alternative methodology.(5)The department, in collaboration with the State Department of Education, shall review and update the alternative methodology every three years.(6)The department, in collaboration with the State Department of Education, shall seek preapproval from the United States Department of Health and Human Services to amend the states current Child Care and Development Fund State Plan to change its current methodology for determining childcare and development and preschool subsidy payment rates to an alternative methodology, as described in this section.(7) The application for preapproval in paragraph (6) shall be submitted no sooner than 30 days after notification in writing to the chairperson of the Joint Legislative Budget Committee, or not sooner than whatever lesser time the chairperson of the joint committee, or their designee, determines is appropriate. (e)This section shall become inoperative on the date the department notifies the Legislature in writing that the department has adopted the alternative methodology described in subdivision (d), and, as of January 1 of the following year, is repealed. SEC. 8.Section 10280 is added to the Welfare and Institutions Code, to read:10280.(a)The department, in collaboration with the State Department of Education, shall implement an alternative methodology for calculating subsidy payment rates for services provided under this part and California state preschool program services administered by the State Department of Education, in accordance with both of the following:(1)The alternative methodology shall build on the recommendations of the working group established pursuant to Section 10280.2, and shall be aligned with the recommendations of the Joint Labor Management Committee established pursuant to Section 10280.2.(2)The alternative methodology shall use a cost estimation model that includes all of the following:(A)Program models will meet the current statutory and regulatory requirements for each program.(B)Staff salaries and benefits.(C)Training and professional development.(D)Curricula and supplies.(E)Group size and ratios.(F)Enrollment levels.(G)Facilities and other costs.(H)Family engagement.(b)If necessary, the department, in collaboration with the State Department of Education, shall implement an interim transition plan to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Commencing in the 202728 fiscal year, the department shall fully implement the alternative methodology, no sooner than 30 days after notification in writing to the chairperson of the Joint Legislative Budget Committee, or not sooner than whatever lesser time the chairperson of the joint committee, or their designee, determines is appropriate. (c)Funding and subsidy payments shall be based on enrollment of certified children with the contract rates set using the alternative methodology.(d)The department, in collaboration with the State Department of Education, shall review and update the alternative methodology every three years.(e)This section shall become operative on the date the department notifies the Legislature in writing that the department has adopted the alternative methodology described in this section.SEC. 9.Section 10290 of the Welfare and Institutions Code is amended to read:10290.(a)The department, in consultation with the State Department of Education, shall establish a fee schedule for families using preschool and childcare and development services pursuant to this part including families receiving services pursuant to paragraph (1) of subdivision (b) of Section 10271. It is the intent of the Legislature that the new fee schedule shall be simple and easy to implement.(b)The family fee schedule shall retain a single flat monthly fee per family. The schedule shall differentiate between fees for part-time care and full-time care.(c)Using the most recently approved family fee schedule pursuant to subdivision (e) of Section 10436, families shall be assessed a single flat monthly fee for all state-subsidized services, including California state preschool program services administered by the State Department of Education, based on income, certified family need for full-time or part-time care services, and enrollment, and shall not be based on actual attendance. No recalculation of a family fee shall occur if attendance varies from enrollment unless a change in need for care is assessed.(d)The department shall design the new family fee schedule based on the most recent census data available on state median family income in the past 12 months, adjusted for family size, according to the methodology provided in subdivision (c) of Section 10271.5. The revised fees shall not exceed 10 percent of the familys monthly income. The department shall first submit the adjusted fee schedule to the Department of Finance for approval.(e)The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with Section 12000) of Part 3 shall not be included in total countable income for purposes of determining the amount of the family fee.(f)Family fees shall be assessed at initial enrollment and reassessed at update of certification or recertification.(g)It is the intent of the Legislature that the new family fees shall be cost neutral to the state and generate roughly the same amount of revenue as was generated under the previous family fee schedule.(h)Notwithstanding any other provision of this chapter, family fees shall not be collected for the 202122 fiscal year pursuant to Section 263 of the act that added this section.(i)Notwithstanding any other provision of this chapter, family fees shall not be collected for the 202223 fiscal year.(j)During the 202223 fiscal year, contractors shall reimburse subsidized childcare providers for the full amount of the certificate or voucher without deducting family fees.(k)(1)Notwithstanding any other provision of this chapter, family fees shall not be collected between July 1, 2023, and September 30, 2023, inclusive.(2)Between July 1, 2023, and September 30, 2023, inclusive, contractors shall reimburse subsidized childcare providers for the full amount of the certificate or voucher without deducting family fees.(3)Notwithstanding any other law, federal funds that were previously appropriated in Sections 263 and 265 of Chapter 116 of the Statutes of 2021 to expand childcare access slots and provide for family fee waivers and the reimbursement for waived family fees shall be available in the 202324 fiscal year in an amount that is equal to the cost to extend family fee waivers between July 1, 2023, and September 30, 2023, inclusive, for all families receiving subsidized childcare services from childcare providers through programs administered by the State Department of Social Services pursuant to Chapter 3 (commencing with Section 10225), Chapter 6 (commencing with Section 10235), Chapter 7 (commencing with Section 10240), Chapter 8 (commencing with Section 10250), Chapter 9 (commencing with Section 10260), Chapter 21 (commencing with Section 10370), and Section 11461.6.(l)Notwithstanding any other law, the department, in consultation with the State Department of Education, shall develop an equitable sliding scale for the payment of family fees, and family fees shall not be collected until the new equitable sliding scale is implemented.The Legislature finds and declares all of the following:
(a)The Legislature, through the passage of Assembly Bill 131 in 2021, required the State Department of Social Services, in consultation with the State Department of Education, to convene and create the Rate and Quality Workgroup to assess the methodology for establishing subsidy payment rates for childcare and development and preschool programs and to make related recommendations.
(b)The workgroup submitted two reports to the Legislature recommending that the state create a single subsidy payment rate structure that addresses quality standards for equity and accessibility while supporting positive learning and developmental outcomes for children.
(c)It is the intent of the Legislature that this act implements the recommendations of the workgroup to create a new subsidy payment rate structure for childcare and development and preschool programs.
SEC. 2.Section 8242 of the Education Code is amended to read:8242.(a)The department, in collaboration with the State Department of Social Services, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.(1)Parent fees shall be used to pay reasonable and necessary costs for providing additional services.(2)The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.(b)(1)(A)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand nine hundred sixty-eight dollars ($12,968).(B)Commencing July 1, 2021, the standard reimbursement rate for part-day California state preschool programs shall be five thousand six hundred twenty-one dollars ($5,621).(2)Commencing in the 202223 fiscal year, the standard reimbursement rates described in paragraph (1) shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15.(c)(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:(A)The 75th percentile of the 2018 regional market rate survey.(B)The contract per-child reimbursement amount as of December 31, 2021, as increased by the cost-of-living adjustment pursuant to paragraph (2) of subdivision (b).(2)In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and the information shall include, but not be limited to, all of the following:(A)Address, including ZIP Code.(B)Race and ethnicity.(C)Gender.(D)Whether the provider is open and available to provide childcare services or closed due to the COVID-19 public health emergency.(E)What types of federal relief funds have been received from the state.(F)Use of federal relief funds received.(G)Documentation that the provider met certifications as required by federal law.(3)Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.(d)This section shall become inoperative on the date the department notifies the Legislature that the department has adopted the alternative methodology described in subdivision (d) of Section 10280 of the Welfare and Institutions Code, as amended by the act that added this subdivision, and, as of January 1 of the following year, is repealed.SEC. 2.Section 8242 of the Education Code is amended to read:8242.(a)The department, in collaboration with the State Department of Social Services, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.
(1)Parent fees shall be used to pay reasonable and necessary costs for providing additional services.
(2)The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.
(b)(1)(A)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand nine hundred sixty-eight dollars ($12,968).
(B)Commencing July 1, 2021, the standard reimbursement rate for part-day California state preschool programs shall be five thousand six hundred twenty-one dollars ($5,621).
(2)Commencing in the 202223 fiscal year, the standard reimbursement rates described in paragraph (1) shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15.
(c)(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:
(A)The 75th percentile of the 2018 regional market rate survey.
(B)The contract per-child reimbursement amount as of December 31, 2021, as increased by the cost-of-living adjustment pursuant to paragraph (2) of subdivision (b).
(2)Commencing July 1, 2022, subject to available funding, the department may issue temporary rate increases to contractors that exceed the rates specified in paragraph (1) and the reimbursement rate supplements described in Section 51 of Chapter 571 of the Statutes of 2022.
(3)In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and the information shall include, but not be limited to, all of the following:
(A)Address, including ZIP Code.
(B)Race and ethnicity.
(C)Gender.
(D)Whether the provider is open and available to provide childcare services or closed due to the COVID-19 public health emergency.
(E)What types of federal relief funds have been received from the state.
(F)Use of federal relief funds received.
(G)Documentation that the provider met certifications as required by federal law.
(4)Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.
(d)This section shall become inoperative on the date the department notifies the Legislature in writing that the department has adopted the alternative methodology described in subdivision (d) of Section 10280 of the Welfare and Institutions Code, as amended by the act that added this subdivision, and, as of January 1 of the following year, is repealed.
SEC. 3.Section 8242 is added to the Education Code, to read:8242.(a)The department, in collaboration with the State Department of Social Services, shall implement the alternative methodology for calculating subsidy payment rates for California state preschool program services provided under this chapter.
(b)If necessary, the department, in collaboration with the State Department of Social Services, shall implement an interim transition plan to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Commencing in the 202728 fiscal year, the department shall fully implement the alternative methodology no sooner than 30 days after notification in writing to the chairperson of the Joint Legislative Budget Committee, or not sooner than whatever lesser time the chairperson of the joint committee, or their designee, determines is appropriate.
(b)(c)This section shall become operative on the date the department notifies the Legislature in writing that the department has adopted the alternative methodology described in Section 10280 of the Welfare and Institutions Code, as added by the act that added this section.
SEC. 4.Section 8245.5 of the Education Code is amended to read:8245.5.(a)Notwithstanding any other law, contracting agencies operating a California state preschool program shall be reimbursed
100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less, pursuant to guidance released by the Superintendent.
(b)Notwithstanding any other law, reimbursement for full-day and part-day California state preschool family childcare home education network providers shall be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance.
SEC. 5.Section 8252 of the Education Code is amended to read:8252.(a)The Superintendent shall use the fee schedule developed in conjunction with the State Department of Social Services for families using full-day preschool services pursuant to this chapter, including families receiving services pursuant to subdivision (a) of Section 8211.(b)Families shall be assessed a single flat monthly fee for all state subsidized early childhood services received, including California state preschool program services and services received through childcare and development programs administered by the State Department of Social Services, pursuant to Section 10290 of the Welfare and Institutions Code.(c)The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code shall not be included in total countable income for purposes of determining the amount of the family fee.(d)Family fees shall be assessed at initial enrollment and reassessed at recertification.(e)Family fees shall be used by contractors to pay reasonable and necessary costs for providing additional services.(f)It is the intent of the Legislature that the new family fees shall be cost neutral to the state and generate roughly the same amount of revenue as was generated under the previous family fee schedule.(g)Notwithstanding any other provision of this article, family fees shall not be collected for the 202122 fiscal year pursuant to Section 263 of the act that added this subdivision.(h)(1)Notwithstanding any other law, family fees shall not be collected for the 202223 fiscal year.(2)Contractors shall reimburse providers operating within a family childcare home education network for the full amount of the certificate or voucher without deducting family fees.(i)Notwithstanding any other law, family fees shall not be collected until the new equitable sliding scale is established and implemented pursuant to Section 10290 of the Welfare and Institutions Code.SEC. 5.Section 8252 of the Education Code is amended to read:8252.(a)The Superintendent shall use the fee schedule developed in conjunction with the State Department of Social Services for families using full-day preschool services pursuant to this chapter, including families receiving services pursuant to subdivision (a) of Section 8211.
(b)Families shall be assessed a single flat monthly fee for all state subsidized early childhood services received, including California state preschool program services and services received through childcare and development programs administered by the State Department of Social Services, pursuant to Section 10290 of the Welfare and Institutions Code.
(c)The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code shall not be included in total countable income for purposes of determining the amount of the family fee.
(d)Family fees shall be assessed at initial enrollment and reassessed at recertification.
(e)Family fees shall be used by contractors to pay reasonable and necessary costs for providing additional services.
(f)It is the intent of the Legislature that the new family fees shall be cost neutral to the state and generate roughly the same amount of revenue as was generated under the previous family fee schedule.
(g)Notwithstanding any other provision of this article, family fees shall not be collected for the 202122 fiscal year pursuant to Section 263 of the act that added this subdivision.
(h)(1)Notwithstanding any other law, family fees shall not be collected for the 202223 fiscal year.
(2)Contractors shall reimburse providers operating within a family childcare home education network for the full amount of the certificate or voucher without deducting family fees.
(i)(1)Notwithstanding any other law, family fees shall not be collected between July 1, 2023, and September 30, 2023, inclusive.
(2)Contractors shall reimburse providers operating within a family childcare home education network for the full amount of the certificate or voucher without deducting family fees.
(j)Notwithstanding any other law, family fees shall not be collected until the new equitable sliding scale is established and implemented pursuant to Section 10290 of the Welfare and Institutions Code.
SEC. 6.Section 10227.5 of the Welfare and Institutions Code is amended to read:10227.5.(a)Childcare providers authorized to provide services pursuant to this chapter shall submit to the alternative payment program a monthly attendance record or invoice for each child who received services that, at a minimum, documents the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day. The information shall be documented on a daily basis.
(b)The monthly attendance record or invoice shall, at a minimum, be signed by the parent or guardian of the child receiving services and the childcare provider once per month to attest that the childs attendance is accurately reflected. The verification of attendance shall be made by signature at the end of each month of care and under penalty of perjury by both the parent or guardian of the child receiving services and the childcare provider.
(c)The monthly attendance record or invoice shall be maintained by the childcare provider in the unaltered original format in which it was created, which may be in paper form or electronic format.
(d)The alternative payment program shall accept the monthly attendance record or invoice as documentation of the hours of care provided if the attendance record or invoice includes adequate information documented on a daily basis, including, at a minimum, the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day. Reimbursement for childcare providers, including license-exempt providers, shall be based on the maximum certified hours of care, regardless of attendance, as follows:
(1)Providers shall be reimbursed based on the maximum certified hours of care.
(2)For families certified for a variable schedule, providers shall be reimbursed based on the maximum certified hours of care.
(3)For license-exempt providers that provide part-time services, providers shall be reimbursed based on the maximum certified hours of care.
(e)For purposes of reimbursement to providers through an alternative payment program, contractors shall not be required to track absences.
(f)For purposes of this section, a monthly attendance record or invoice is defined as documentation that includes, at a minimum, the name of the child receiving services, the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day, that is signed under penalty of perjury by both the parent or guardian and the childcare provider, attesting that the information provided is accurate.
(g)Contracting agencies operating a general childcare and development program pursuant to Chapter 7 (commencing with Section 10240) of this part, also known as a General Child Care Program, shall be reimbursed 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less.
SEC. 7.Section 10280 of the Welfare and Institutions Code is amended to read:10280.(a)The department, in collaboration with the State Department of Education, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.(1)Parent fees shall be used to pay reasonable and necessary costs for providing additional services.(2)When establishing standards and assigned reimbursement rates, the department and the State Department of Education shall confer with applicant agencies.(3)The reimbursement system, including standards and rates, shall be submitted to the Joint Legislative Budget Committee.(4)The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.(b)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand eight hundred eighty-eight dollars ($12,888) and, commencing with the 202223 fiscal year, shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15 of the Education Code.(c)(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:(A)The 75th percentile of the 2018 regional market rate survey.(B)The contract per-child reimbursement amount as of December 31, 2021.(2)In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and information shall include, but not be limited to, all of the following:(A)Address, including ZIP Code.(B)Race and ethnicity.(C)Gender.(D)Whether the provider is open and available to provide childcare services or closed due to the COVID-19 public health emergency.(E)What types of federal relief funds have been received from the state.(F)Use of federal relief funds received.(G)Documentation that the provider met certifications as required by federal law.(3)Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.(d)(1)The department, in collaboration with the State Department of Education, shall develop an alternative methodology for calculating subsidy payment rates for services provided under this part and California state preschool program services administered by the State Department of Education, in accordance with both of the following:(A)The alternative methodology shall build on the recommendations of the working group established pursuant to Section 10280.2, and shall be aligned with the recommendations of the Joint Labor Management Committee established pursuant to Section 10280.2.(B)The alternative methodology shall use a cost estimation model that includes all of the following:(i)Program models will meet the current statutory and regulatory requirements for each program.(ii)Staff salaries and benefits.(iii)Training and professional development.(iv)Curricula and supplies.(v)Group size and ratios.(vi)Enrollment levels.(vii)Facilities and other costs.(viii)Family engagement.(2)If necessary, the department shall develop an interim transition plan to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Commencing in the 202728 fiscal year, the department shall fully implement the alternative methodology.(3)Any funding provided in the Budget Act of 2023 to increase reimbursement rates shall be distributed using the interim transition plan described in paragraph (2), if that plan has been developed, until the alternative methodology described in paragraph (1) is adopted.(4)Funding and subsidy payments shall be based on enrollment of certified children with the contract rates set using the alternative methodology.(5)The department shall review and update the alternative methodology every three years.(6)The department shall seek preapproval from the United States Department of Health and Human Services to amend the states current Child Care and Development Fund State Plan to change its current methodology for determining childcare and development and preschool subsidy payment rates to an alternative methodology, as described in this section.(e)This section shall become inoperative on the date the department notifies the Legislature that the department has adopted the alternative methodology described in subdivision (d), and, as of January 1 of the following year, is repealed.SEC. 7.Section 10280 of the Welfare and Institutions Code is amended to read:10280.(a)The department, in collaboration with the State Department of Education, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.
(1)Parent fees shall be used to pay reasonable and necessary costs for providing additional services.
(2)When establishing standards and assigned reimbursement rates, the department and the State Department of Education shall confer with applicant agencies.
(3)The reimbursement system, including standards and rates, shall be submitted to the Joint Legislative Budget Committee.
(4)The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.
(b)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand eight hundred eighty-eight dollars ($12,888) and, commencing with the 202223 fiscal year, shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15 of the Education Code.
(c)(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:
(A)The 75th percentile of the 2018 regional market rate survey.
(B)The contract per-child reimbursement amount as of December 31, 2021.
(2)(A)Commencing July 1, 2022, subject to available funding, the department may issue temporary rate increases to contractors that exceed the rates specified in paragraph (1). The department shall have discretion in determining how funding may be used to increase the rates, including, but not limited to, providing one-time lump-sum payments. The department may contract with another entity to distribute this funding to contractors.
(B)Notwithstanding any other law, contracts or grants awarded pursuant to this subparagraph shall be exempt from the personal services contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, the Public Contract Code, and the State Contracting Manual, and shall not be subject to review or approval of the Department of General Services.
(3)In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and information shall include, but not be limited to, all of the following:
(A)Address, including ZIP Code.
(B)Race and ethnicity.
(C)Gender.
(D)Whether the provider is open and available to provide childcare services or closed due to the COVID-19 public health emergency.
(E)What types of federal relief funds have been received from the state.
(F)Use of federal relief funds received.
(G)Documentation that the provider met certifications as required by federal law.
(4)Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.
(d)(1)The department, in collaboration with the State Department of Education, shall develop an alternative methodology for calculating subsidy payment rates for services provided under this part and California state preschool program services administered by the State Department of Education, in accordance with both of the following:
(A)The alternative methodology shall build on the recommendations of the working group established pursuant to Section 10280.2, and shall be aligned with the recommendations of the Joint Labor Management Committee established pursuant to Section 10280.2.
(B)The alternative methodology shall use a cost estimation model that includes all of the following:
(i)Program models will meet the current statutory and regulatory requirements for each program.
(ii)Staff salaries and benefits.
(iii)Training and professional development.
(iv)Curricula and supplies.
(v)Group size and ratios.
(vi)Enrollment levels.
(vii)Facilities and other costs.
(viii)Family engagement.
(2)If necessary, the department, in collaboration with the State Department of Education, shall develop an interim transition plan to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Commencing in the 202728 fiscal year, the department shall fully implement the alternative methodology, no sooner than 30 days after notification in writing to the chairperson of the Joint Legislative Budget Committee, or not sooner than whatever lesser time the chairperson of the joint committee, or their designee, determines is appropriate.
(3)Any funding provided in the Budget Act of 2023 to increase reimbursement rates shall be distributed using the interim transition plan described in paragraph (2), if that plan has been developed, until the alternative methodology described in paragraph (1) is adopted.
(4)Funding and subsidy payments shall be based on enrollment of certified children with the contract rates set using the alternative methodology.
(5)The department, in collaboration with the State Department of Education, shall review and update the alternative methodology every three years.
(6)The department, in collaboration with the State Department of Education, shall seek preapproval from the United States Department of Health and Human Services to amend the states current Child Care and Development Fund State Plan to change its current methodology for determining childcare and development and preschool subsidy payment rates to an alternative methodology, as described in this section.
(7) The application for preapproval in paragraph (6) shall be submitted no sooner than 30 days after notification in writing to the chairperson of the Joint Legislative Budget Committee, or not sooner than whatever lesser time the chairperson of the joint committee, or their designee, determines is appropriate.
(e)This section shall become inoperative on the date the department notifies the Legislature in writing that the department has adopted the alternative methodology described in subdivision (d), and, as of January 1 of the following year, is repealed.
SEC. 8.Section 10280 is added to the Welfare and Institutions Code, to read:10280.(a)The department, in collaboration with the State Department of Education, shall implement an alternative methodology for calculating subsidy payment rates for services provided under this part and California state preschool program services administered by the State Department of Education, in accordance with both of the following:
(1)The alternative methodology shall build on the recommendations of the working group established pursuant to Section 10280.2, and shall be aligned with the recommendations of the Joint Labor Management Committee established pursuant to Section 10280.2.
(2)The alternative methodology shall use a cost estimation model that includes all of the following:
(A)Program models will meet the current statutory and regulatory requirements for each program.
(B)Staff salaries and benefits.
(C)Training and professional development.
(D)Curricula and supplies.
(E)Group size and ratios.
(F)Enrollment levels.
(G)Facilities and other costs.
(H)Family engagement.
(b)If necessary, the department department, in collaboration with the State Department of Education, shall implement an interim transition plan to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Commencing in the 202728 fiscal year, the department shall fully implement the alternative methodology. methodology, no sooner than 30 days after notification in writing to the chairperson of the Joint Legislative Budget Committee, or not sooner than whatever lesser time the chairperson of the joint committee, or their designee, determines is appropriate.
(c)Funding and subsidy payments shall be based on enrollment of certified children with the contract rates set using the alternative methodology.
(d)The department department, in collaboration with the State Department of Education, shall review and update the alternative methodology every three years.
(e)This section shall become operative on the date the department notifies the Legislature in writing that the department has adopted the alternative methodology described in this section.
SEC. 9.Section 10290 of the Welfare and Institutions Code is amended to read:10290.(a)The department, in consultation with the State Department of Education, shall establish a fee schedule for families using preschool and child care and development services pursuant to this part including families receiving services pursuant to paragraph (1) of subdivision (b) of Section 10271. It is the intent of the Legislature that the new fee schedule shall be simple and easy to implement.(b)The family fee schedule shall retain a single flat monthly fee per family. The schedule shall differentiate between fees for part-time care and full-time care.(c)Using the most recently approved family fee schedule pursuant to subdivision (e) of Section 10436, families shall be assessed a single flat monthly fee for all state-subsidized services, including California state preschool program services administered by the State Department of Education, based on income, certified family need for full-time or part-time care services, and enrollment, and shall not be based on actual attendance. No recalculation of a family fee shall occur if attendance varies from enrollment unless a change in need for care is assessed.(d)The department shall design the new family fee schedule based on the most recent census data available on state median family income in the past 12 months, adjusted for family size, according to the methodology provided in subdivision (c) of Section 10271.5. The revised fees shall not exceed 10 percent of the familys monthly income. The department shall first submit the adjusted fee schedule to the Department of Finance for approval.(e)The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with Section 12000) of Part 3 shall not be included in total countable income for purposes of determining the amount of the family fee.(f)Family fees shall be assessed at initial enrollment and reassessed at update of certification or recertification.(g)It is the intent of the Legislature that the new family fees shall be cost neutral to the state and generate roughly the same amount of revenue as was generated under the previous family fee schedule.(h)Notwithstanding any other provision of this chapter, family fees shall not be collected for the 202122 fiscal year pursuant to Section 263 of the act that added this section.(i)Notwithstanding any other provision of this chapter, family fees shall not be collected for the 202223 fiscal year.(j)During the 202223 fiscal year, contractors shall reimburse subsidized childcare providers for the full amount of the certificate or voucher without deducting family fees.(k)Notwithstanding any other law, the department, in consultation with the State Department of Education, shall develop an equitable sliding scale for the payment of family fees, and family fees shall not be collected until the new equitable sliding scale is implemented.SEC. 9.Section 10290 of the Welfare and Institutions Code is amended to read:10290.(a)The department, in consultation with the State Department of Education, shall establish a fee schedule for families using preschool and child care childcare and development services pursuant to this part including families receiving services pursuant to paragraph (1) of subdivision (b) of Section 10271. It is the intent of the Legislature that the new fee schedule shall be simple and easy to implement.
(b)The family fee schedule shall retain a single flat monthly fee per family. The schedule shall differentiate between fees for part-time care and full-time care.
(c)Using the most recently approved family fee schedule pursuant to subdivision (e) of Section 10436, families shall be assessed a single flat monthly fee for all state-subsidized services, including California state preschool program services administered by the State Department of Education, based on income, certified family need for full-time or part-time care services, and enrollment, and shall not be based on actual attendance. No recalculation of a family fee shall occur if attendance varies from enrollment unless a change in need for care is assessed.
(d)The department shall design the new family fee schedule based on the most recent census data available on state median family income in the past 12 months, adjusted for family size, according to the methodology provided in subdivision (c) of Section 10271.5. The revised fees shall not exceed 10 percent of the familys monthly income. The department shall first submit the adjusted fee schedule to the Department of Finance for approval.
(e)The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with Section 12000) of Part 3 shall not be included in total countable income for purposes of determining the amount of the family fee.
(f)Family fees shall be assessed at initial enrollment and reassessed at update of certification or recertification.
(g)It is the intent of the Legislature that the new family fees shall be cost neutral to the state and generate roughly the same amount of revenue as was generated under the previous family fee schedule.
(h)Notwithstanding any other provision of this chapter, family fees shall not be collected for the 202122 fiscal year pursuant to Section 263 of the act that added this section.
(i)Notwithstanding any other provision of this chapter, family fees shall not be collected for the 202223 fiscal year.
(j)During the 202223 fiscal year, contractors shall reimburse subsidized childcare providers for the full amount of the certificate or voucher without deducting family fees.
(k)(1)Notwithstanding any other provision of this chapter, family fees shall not be collected between July 1, 2023, and September 30, 2023, inclusive.
(2)Between July 1, 2023, and September 30, 2023, inclusive, contractors shall reimburse subsidized childcare providers for the full amount of the certificate or voucher without deducting family fees.
(3)Notwithstanding any other law, federal funds that were previously appropriated in Sections 263 and 265 of Chapter 116 of the Statutes of 2021 to expand childcare access slots and provide for family fee waivers and the reimbursement for waived family fees shall be available in the 202324 fiscal year in an amount that is equal to the cost to extend family fee waivers between July 1, 2023, and September 30, 2023, inclusive, for all families receiving subsidized childcare services from childcare providers through programs administered by the State Department of Social Services pursuant to Chapter 3 (commencing with Section 10225), Chapter 6 (commencing with Section 10235), Chapter 7 (commencing with Section 10240), Chapter 8 (commencing with Section 10250), Chapter 9 (commencing with Section 10260), Chapter 21 (commencing with Section 10370), and Section 11461.6.
(l)Notwithstanding any other law, the department, in consultation with the State Department of Education, shall develop an equitable sliding scale for the payment of family fees, and family fees shall not be collected until the new equitable sliding scale is implemented.
The Legislature finds and declares all of the following:
(a)The Legislature, through the passage of Assembly Bill 131 in 2021, required the State Department of Social Services, in consultation with the State Department of Education, to convene and create the Rate and Quality Workgroup to assess the methodology for establishing reimbursement subsidy payment rates for child care childcare and development and preschool programs and to make related recommendations.
(b)The workgroup submitted two reports to the Legislature recommending that the state create a single reimbursement subsidy payment rate structure that addresses quality standards for equity and accessibility while supporting positive learning and developmental outcomes for children.
(c)It is the intent of the Legislature that this act implements the recommendations of the workgroup to create a new reimbursement subsidy payment rate structure for child care childcare and development and preschool programs.
SEC. 2.Section 8242 of the Education Code is amended to read:8242.(a)The department, in collaboration with the State Department of Social Services, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.
(1)Parent fees shall be used to pay reasonable and necessary costs for providing additional services.
(2)The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.
(b)(1)(A)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand nine hundred sixty-eight dollars ($12,968).
(B)Commencing July 1, 2021, the standard reimbursement rate for part-day California state preschool programs shall be five thousand six hundred twenty-one dollars ($5,621).
(2)Commencing in the 202223 fiscal year, the standard reimbursement rates described in paragraph (1) shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15.
(c)(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:
(A)The 75th percentile of the 2018 regional market rate survey.
(B)The contract per-child reimbursement amount as of December 31, 2021, as increased by the cost-of-living adjustment pursuant to paragraph (2) of subdivision (b).
(2)In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and the information shall include, but not be limited to, all of the following:
(A)Address, including ZIP Code.
(B)Race and ethnicity.
(C)Gender.
(D)Whether the provider is open and available to provide childcare services or closed due to the COVID-19 public health emergency.
(E)What types of federal relief funds have been received from the state.
(F)Use of federal relief funds received.
(G)Documentation that the provider met certifications as required by federal law.
(3)Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.
(d)This section shall become inoperative on the date the department notifies the Legislature that the department has adopted the alternative methodology described in subdivision (d) of Section 10280 of the Welfare and Institutions Code, as amended by the act that added this subdivision, and, as of January 1 of the following year, is repealed.
SEC. 3.Section 8242 is added to the Education Code, to read:8242.(a)The department, in collaboration with the State Department of Social Services, shall implement the alternative methodology for calculating subsidy payment rates for California state preschool program services provided under this chapter.
(b)This section shall become operative on the date the department notifies the Legislature that the department has adopted the alternative methodology described in Section 10280 of the Welfare and Institutions Code, as added by the act that added this section.
SEC. 4.Section 8245.5 of the Education Code is amended to read:8245.5.(a)(1)Notwithstanding any other law, for the 202223 fiscal year only, contracting agencies operating a California state preschool program shall be reimbursed according to paragraph (2), if they meet either of the following requirements:
(A)The program is open and operating in accordance with their approved program calendar and remains open and offering services through the program year.(B)The program operated by the contracting agency is closed by local or state public health order or guidance due to the COVID-19 pandemic.(2)Reimbursement pursuant to paragraph (1) shall be 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less, pursuant to guidance released by the Superintendent.
(3)A California state preschool program that is physically closed as described in subparagraph (B) of paragraph (1) due to the COVID-19 pandemic, but funded to be operational, shall provide distance learning services, as specified by the Superintendent, for the program. A contractor specified in paragraph (1) shall submit a distance learning plan to the department overseeing their contract pursuant to guidance from the Superintendent.(b)Notwithstanding any other law, reimbursement for full-day and part-day California state preschool family childcare home education network providers for the 202223 fiscal year shall be based on the maximum certified hours of care for all families, including families certified for a variable schedule, regardless of attendance.
SEC. 2.SEC. 5.Section 8252 of the Education Code is amended to read:8252.(a)The Superintendent shall use the fee schedule developed in conjunction with the State Department of Social Services for families using full-day preschool services pursuant to this chapter, including families receiving services pursuant to subdivision (a) of Section 8211.
(b)Families shall be assessed a single flat monthly fee for all state subsidized early childhood services received, including California state preschool program services and services received through childcare and development programs administered by the State Department of Social Services, pursuant to Section 10290 of the Welfare and Institutions Code.
(c)The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code shall not be included in total countable income for purposes of determining the amount of the family fee.
(d)Family fees shall be assessed at initial enrollment and reassessed at recertification.
(e)Family fees shall be used by contractors to pay reasonable and necessary costs for providing additional services.
(f)It is the intent of the Legislature that the new family fees shall be cost neutral to the state and generate roughly the same amount of revenue as was generated under the previous family fee schedule.
(g)Notwithstanding any other provision of this article, family fees shall not be collected for the 202122 fiscal year pursuant to Section 263 of the act that added this subdivision.
(h)(1)Notwithstanding any other law, family fees shall not be collected for the 202223 fiscal year.
(2)Contractors shall reimburse providers operating within a family childcare home education network for the full amount of the certificate or voucher without deducting family fees.
(i)Notwithstanding any other law, family fees shall not be collected until the new equitable sliding scale is established and implemented pursuant to Section 10290 of the Welfare and Institutions Code.
SEC. 6.Section 10227.5 of the Welfare and Institutions Code is amended to read:10227.5.(a)Child care Childcare providers authorized to provide services pursuant to this chapter shall submit to the alternative payment program a monthly attendance record or invoice for each child who received services that, at a minimum, documents the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day. The information shall be documented on a daily basis.
(b)The monthly attendance record or invoice shall, at a minimum, be signed by the parent or guardian of the child receiving services and the child care childcare provider once per month to attest that the childs attendance is accurately reflected. The verification of attendance shall be made by signature at the end of each month of care and under penalty of perjury by both the parent or guardian of the child receiving services and the child care childcare provider.
(c)The monthly attendance record or invoice shall be maintained by the child care childcare provider in the unaltered original format in which it was created, which may be in paper form or electronic format.
(d)The alternative payment program shall accept the monthly attendance record or invoice as documentation of the hours of care provided if the attendance record or invoice includes adequate information documented on a daily basis, including, at a minimum, the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day. The alternative payment program shall reimburse child care providers based upon the following criteria: Reimbursement for childcare providers, including license-exempt providers, shall be based on the maximum certified hours of care, regardless of attendance, as follows:
(1)The hours of service provided that are broadly consistent with certified hours of need.(2)For families with variable schedules, the actual days and hours of attendance, up to the maximum certified hours.(3)For license-exempt providers that provide part-time services, the actual days and hours of attendance, up to the maximum certified hours.(1)Providers shall be reimbursed based on the maximum certified hours of care.
(2)For families certified for a variable schedule, providers shall be reimbursed based on the maximum certified hours of care.
(3)For license-exempt providers that provide part-time services, providers shall be reimbursed based on the maximum certified hours of care.
(e)For purposes of reimbursement to providers through an alternative payment program, contractors shall not be required to track absences.
(f)For purposes of this section, a monthly attendance record or invoice is defined as documentation that includes, at a minimum, the name of the child receiving services, the dates and actual times care was provided each day, including the time the child entered care and the time the child left care each day, that is signed under penalty of perjury by both the parent or guardian and the child care childcare provider, attesting that the information provided is accurate.
SEC. 3.SEC. 7.Section 10280 of the Welfare and Institutions Code is amended to read:10280.(a)The department, in collaboration with the State Department of Education, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.
(1)Parent fees shall be used to pay reasonable and necessary costs for providing additional services.
(2)When establishing standards and assigned reimbursement rates, the department and the State Department of Education shall confer with applicant agencies.
(3)The reimbursement system, including standards and rates, shall be submitted to the Joint Legislative Budget Committee.
(4)The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.
(b)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand eight hundred eighty-eight dollars ($12,888) and, commencing with the 202223 fiscal year, shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15 of the Education Code.
(c)(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:
(A)The 75th percentile of the 2018 regional market rate survey.
(B)The contract per-child reimbursement amount as of December 31, 2021.
(2)In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and information shall include, but not be limited to, all of the following:
(A)Address, including ZIP Code.
(B)Race and ethnicity.
(C)Gender.
(D)Whether the provider is open and available to provide childcare services or closed due to the COVID-19 public health emergency.
(E)What types of federal relief funds have been received from the state.
(F)Use of federal relief funds received.
(G)Documentation that the provider met certifications as required by federal law.
(3)Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.
(d)(1)The department, in collaboration with the State Department of Education, shall develop an alternative methodology for calculating reimbursement subsidy payment rates for services provided under this part and California state preschool program services administered by the State Department of Education, in accordance with both of the following:
(A)The alternative methodology shall build on the recommendations of the working group established pursuant to Section 10280.2, and shall be aligned with the recommendations of the Joint Labor Management Committee established pursuant to Section 10280.2.
(B)The alternative methodology shall use a cost estimation model that includes all of the following:
(i)Program models will meet the current statutory and regulatory requirements for each program.
(ii)Staff salaries and benefits.
(iii)Training and professional development.
(iv)Curricula and supplies.
(v)Group size and ratios.
(vi)Enrollment levels.
(vii)Facilities and other costs.
(viii)Family engagement.
(2)The If necessary, the department shall develop a transition methodology an interim transition plan to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Commencing in the 202728 fiscal year, the department shall fully implement the alternative methodology.
(3)Any funding provided in the Budget Act of 2023 to increase reimbursement rates shall be distributed using the transition methodology interim transition plan described in paragraph (2) (2), if that plan has been developed, until the alternative methodology described in paragraph (1) is adopted.
(4)Funding and reimbursements subsidy payments shall be based on enrollment of certified children with the contract rates set using the alternative methodology.
(5)The department shall review and update the alternative methodology every three years.
(6)The department shall seek preapproval from the United States Department of Health and Human Services to amend the states current Child Care and Development Fund State Plan to change its current methodology for determining childcare and development and preschool reimbursement subsidy payment rates to an alternative methodology, as described in this section.
(e)This section shall become inoperative on the date the department notifies the Legislature that the department has adopted the alternative methodology described in subdivision (d), and, as of January 1 of the following year, is repealed.
SEC. 8.Section 10280 is added to the Welfare and Institutions Code, to read:10280.(a)The department, in collaboration with the State Department of Education, shall implement an alternative methodology for calculating subsidy payment rates for services provided under this part and California state preschool program services administered by the State Department of Education, in accordance with both of the following:
(1)The alternative methodology shall build on the recommendations of the working group established pursuant to Section 10280.2, and shall be aligned with the recommendations of the Joint Labor Management Committee established pursuant to Section 10280.2.
(2)The alternative methodology shall use a cost estimation model that includes all of the following:
(A)Program models will meet the current statutory and regulatory requirements for each program.
(B)Staff salaries and benefits.
(C)Training and professional development.
(D)Curricula and supplies.
(E)Group size and ratios.
(F)Enrollment levels.
(G)Facilities and other costs.
(H)Family engagement.
(b)If necessary, the department shall implement an interim transition plan to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Commencing in the 202728 fiscal year, the department shall fully implement the alternative methodology.
(c)Funding and subsidy payments shall be based on enrollment of certified children with the contract rates set using the alternative methodology.
(d)The department shall review and update the alternative methodology every three years.
(e)This section shall become operative on the date the department notifies the Legislature that the department has adopted the alternative methodology described in this section.
SEC. 4.SEC. 9.Section 10290 of the Welfare and Institutions Code is amended to read:10290.(a)The department, in consultation with the State Department of Education, shall establish a fee schedule for families using preschool and child care and development services pursuant to this part including families receiving services pursuant to paragraph (1) of subdivision (b) of Section 10271. It is the intent of the Legislature that the new fee schedule shall be simple and easy to implement.
(b)The family fee schedule shall retain a single flat monthly fee per family. The schedule shall differentiate between fees for part-time care and full-time care.
(c)Using the most recently approved family fee schedule pursuant to subdivision (e) of Section 10436, families shall be assessed a single flat monthly fee for all state-subsidized services, including California state preschool program services administered by the State Department of Education, based on income, certified family need for full-time or part-time care services, and enrollment, and shall not be based on actual attendance. No recalculation of a family fee shall occur if attendance varies from enrollment unless a change in need for care is assessed.
(d)The department shall design the new family fee schedule based on the most recent census data available on state median family income in the past 12 months, adjusted for family size, according to the methodology provided in subdivision (c) of Section 10271.5. The revised fees shall not exceed 10 percent of the familys monthly income. The department shall first submit the adjusted fee schedule to the Department of Finance for approval.
(e)The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with Section 12000) of Part 3 shall not be included in total countable income for purposes of determining the amount of the family fee.
(f)Family fees shall be assessed at initial enrollment and reassessed at update of certification or recertification.
(g)It is the intent of the Legislature that the new family fees shall be cost neutral to the state and generate roughly the same amount of revenue as was generated under the previous family fee schedule.
(h)Notwithstanding any other provision of this chapter, family fees shall not be collected for the 202122 fiscal year pursuant to Section 263 of the act that added this section.
(i)Notwithstanding any other provision of this chapter, family fees shall not be collected for the 202223 fiscal year.
(j)During the 202223 fiscal year, contractors shall reimburse subsidized childcare providers for the full amount of the certificate or voucher without deducting family fees.
(k)Notwithstanding any other law, the department, in consultation with the State Department of Education, shall develop an equitable sliding scale for the payment of family fees, and family fees shall not be collected until the new equitable sliding scale is implemented.
The Legislature finds and declares all of the following:
(a)The Legislature, through the passage of Assembly Bill 131 in 2021, required the State Department of Social Services, in consultation with the State Department of Education, to convene and create the Rate and Quality Workgroup to assess the methodology for establishing reimbursement rates for child care and development and preschool programs and to make related recommendations.
(b)The workgroup submitted two reports to the Legislature recommending that the state create a single reimbursement rate structure that addresses quality standards for equity and accessibility while supporting positive learning and developmental outcomes for children.
(c)It is the intent of the Legislature that this act implements the recommendations of the workgroup to create a new reimbursement rate structure for child care and development and preschool programs.
SEC. 2.Section 8252 of the Education Code is amended to read:8252.(a)The Superintendent shall use the fee schedule developed in conjunction with the State Department of Social Services for families using full-day preschool services pursuant to this chapter, including families receiving services pursuant to subdivision (a) of Section 8211.
(b)Families shall be assessed a single flat monthly fee for all state subsidized early childhood services received, including California state preschool program services and services received through childcare and development programs administered by the State Department of Social Services, pursuant to Section 10290 of the Welfare and Institutions Code.
(c)The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with Section 12000) of Part 3 of Division 9 of the Welfare and Institutions Code shall not be included in total countable income for purposes of determining the amount of the family fee.
(d)Family fees shall be assessed at initial enrollment and reassessed at recertification.
(e)Family fees shall be used by contractors to pay reasonable and necessary costs for providing additional services.
(f)It is the intent of the Legislature that the new family fees shall be cost neutral to the state and generate roughly the same amount of revenue as was generated under the previous family fee schedule.
(g)Notwithstanding any other provision of this article, family fees shall not be collected for the 202122 fiscal year pursuant to Section 263 of the act that added this subdivision.
(h)(1)Notwithstanding any other law, family fees shall not be collected for the 202223 fiscal year.
(2)Contractors shall reimburse providers operating within a family childcare home education network for the full amount of the certificate or voucher without deducting family fees.
(i)Notwithstanding any other law, family fees shall not be collected until the new equitable sliding scale is established and implemented pursuant to Section 10290 of the Welfare and Institutions Code.
SEC. 3.Section 10280 of the Welfare and Institutions Code is amended to read:10280.(a)The department, in collaboration with the State Department of Education, shall implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service.
(1)Parent fees shall be used to pay reasonable and necessary costs for providing additional services.
(2)When establishing standards and assigned reimbursement rates, the department and the State Department of Education shall confer with applicant agencies.
(3)The reimbursement system, including standards and rates, shall be submitted to the Joint Legislative Budget Committee.
(4)The department may establish any regulations deemed advisable concerning conditions of service and hours of enrollment for children in the programs.
(b)Commencing July 1, 2021, the standard reimbursement rate shall be twelve thousand eight hundred eighty-eight dollars ($12,888) and, commencing with the 202223 fiscal year, shall be increased by the cost-of-living adjustment granted by the Legislature annually pursuant to Section 42238.15 of the Education Code.
(c)(1)Commencing January 1, 2022, contractors who, as of December 31, 2021, received the standard reimbursement rate established in this section shall be reimbursed at the greater of the following:
(A)The 75th percentile of the 2018 regional market rate survey.
(B)The contract per-child reimbursement amount as of December 31, 2021.
(2)In accordance with federal requirements for Child Care Stabilization Grants appropriated pursuant to the federal American Rescue Plan Act of 2021 (Public Law 117-2), contractors shall provide information via a one-time application or survey in advance of receiving American Rescue Plan Act funds. The department shall specify the timeline and format in which this information shall be submitted, and information shall include, but not be limited to, all of the following:
(A)Address, including ZIP Code.
(B)Race and ethnicity.
(C)Gender.
(D)Whether the provider is open and available to provide child care childcare services or closed due to the COVID-19 public health emergency.
(E)What types of federal relief funds have been received from the state.
(F)Use of federal relief funds received.
(G)Documentation that the provider met certifications as required by federal law.
(3)Rate increases shall be subject to federal usage limitations and federal and state program eligibility requirements.
(d)(1)The department, in collaboration with the State Department of Education, shall develop an alternative methodology for calculating reimbursement rates for services provided under this part and California state preschool program services administered by the State Department of Education, in accordance with both of the following:
(A)The alternative methodology shall build on the recommendations of the working group established pursuant to Section 10280.2, and shall be aligned with the recommendations of the Joint Labor Management Committee established pursuant to Section 10280.2.
(B)The alternative methodology shall use a cost estimation model that includes all of the following:
(i)Program models will meet the current statutory and regulatory requirements for each program.
(ii)Staff salaries and benefits.
(iii)Training and professional development.
(iv)Curricula and supplies.
(v)Group size and ratios.
(vi)Enrollment levels.
(vii)Facilities and other costs.
(viii)Family engagement.
(2)The department shall develop a transition methodology to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Commencing in the 202728 fiscal year, the department shall fully implement the alternative methodology.
(3)Any funding provided in the Budget Act of 2023 to increase reimbursement rates shall be distributed using the transition methodology described in paragraph (2) until the alternative methodology described in paragraph (1) is adopted.
(4)Funding and reimbursements shall be based on enrollment of certified children with the contract rates set using the alternative methodology.
(5)The department shall review and update the alternative methodology every three years.
(6)The department shall seek preapproval from the United States Department of Health and Human Services to amend the states current Child Care and Development Fund State Plan to change its current methodology for determining childcare and development and preschool reimbursement rates to an alternative methodology, as described in this section.
SEC. 4.Section 10290 of the Welfare and Institutions Code is amended to read:10290.(a)The department, in consultation with the State Department of Education, shall establish a fee schedule for families using preschool and child care and development services pursuant to this part including families receiving services pursuant to paragraph (1) of subdivision (b) of Section 10271. It is the intent of the Legislature that the new fee schedule shall be simple and easy to implement.
(b)The family fee schedule shall retain a single flat monthly fee per family. The schedule shall differentiate between fees for part-time care and full-time care.
(c)Using the most recently approved family fee schedule pursuant to subdivision (e) of Section 10436, families shall be assessed a single flat monthly fee for all state-subsidized services, including California state preschool program services administered by the State Department of Education, based on income, certified family need for full-time or part-time care services, and enrollment, and shall not be based on actual attendance. No recalculation of a family fee shall occur if attendance varies from enrollment unless a change in need for care is assessed.
(d)The department shall design the new family fee schedule based on the most recent census data available on state median family income in the past 12 months, adjusted for family size, according to the methodology provided in subdivision (c) of Section 10271.5. The revised fees shall not exceed 10 percent of the familys monthly income. The department shall first submit the adjusted fee schedule to the Department of Finance for approval.
(e)The income of a recipient of federal supplemental security income benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and state supplemental program benefits pursuant to Title XVI of the federal Social Security Act (42 U.S.C. Sec. 1381 et seq.) and Chapter 3 (commencing with Section 12000) of Part 3 shall not be included in total countable income for purposes of determining the amount of the family fee.
(f)Family fees shall be assessed at initial enrollment and reassessed at update of certification or recertification.
(g)It is the intent of the Legislature that the new family fees shall be cost neutral to the state and generate roughly the same amount of revenue as was generated under the previous family fee schedule.
(h)Notwithstanding any other provision of this chapter, family fees shall not be collected for the 202122 fiscal year pursuant to Section 263 of the act that added this section.
(i)Notwithstanding any other provision of this chapter, family fees shall not be collected for the 202223 fiscal year.
(j)During the 202223 fiscal year, contractors shall reimburse subsidized childcare providers for the full amount of the certificate or voucher without deducting family fees.
(k)Notwithstanding any other law, the department, in consultation with the State Department of Education, shall develop an equitable sliding scale for the payment of family fees, and family fees shall not be collected until the new equitable sliding scale is implemented.
SECTION 1.It is the intent of the Legislature to enact legislation relating to rate reform for workers in childcare.It is the intent of the Legislature to enact legislation relating to rate reform for workers in childcare.
|
Date
|
Status
|
|---|---|
| Aug 7, 2024 | August 7 hearing postponed by committee. |
| Jun 26, 2024 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To consent calendar. (Ayes 7. Noes 0.) (June 26). Re-referred to Com. on APPR. |
| Jun 13, 2024 | Re-referred to Com. on ED. pursuant to Assembly Rule 96. |
| Jun 10, 2024 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on APPR. |
| Aug 23, 2023 | August 23 hearing postponed by committee. |
| Jul 13, 2023 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0.) (July 12). Re-referred to Com. on APPR. |
| Jun 26, 2023 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on ED. |
| Jun 21, 2023 | From committee: Do pass and re-refer to Com. on ED. (Ayes 8. Noes 0.) (June 20). Re-referred to Com. on ED. |
| Jun 1, 2023 | Referred to Coms. on HUM. S. and ED. |
| May 25, 2023 | In Assembly. Read first time. Held at Desk. |
| May 24, 2023 | Read third time. Passed. (Ayes 39. Noes 0. Page 1271.) Ordered to the Assembly. |
| May 18, 2023 | From committee: Do pass. (Ayes 6. Noes 1. Page 1168.) (May 18). |
| May 18, 2023 | Read second time. Ordered to third reading. |
| May 12, 2023 | Set for hearing May 18. |
| May 8, 2023 | May 8 hearing: Placed on APPR suspense file. |
| May 1, 2023 | Set for hearing May 8. |
| Apr 26, 2023 | From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 0. Page 935.) (April 26). Re-referred to Com. on APPR. |
| Apr 19, 2023 | Set for hearing April 26. |
| Apr 18, 2023 | From committee: Do pass and re-refer to Com. on ED. (Ayes 4. Noes 0. Page 748.) (April 17). Re-referred to Com. on ED. |
| Apr 18, 2023 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on ED. |
| Apr 11, 2023 | Set for hearing April 17. |
| Mar 29, 2023 | Re-referred to Coms. on HUMAN S. and ED. |
| Mar 20, 2023 | From committee with author's amendments. Read second time and amended. Re-referred to Com. on RLS. |
| Feb 22, 2023 | Referred to Com. on RLS. |
| Feb 10, 2023 | From printer. May be acted upon on or after March 12. |
| Feb 9, 2023 | Introduced. Read first time. To Com. on RLS. for assignment. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Jun 26, 2024 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Education |
Passed |
|
| Jul 12, 2023 | Do pass and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Education |
Passed |
|
| Jun 20, 2023 | Do pass and be re-referred to the Committee on [Education] | Assembly Standing Committee on Human Services |
Passed |
|
| May 24, 2023 | Senate 3rd Reading SB380 Limón et al. | Senate Floor |
Passed |
|
| May 18, 2023 | Do pass | Senate Standing Committee on Appropriations |
Passed |
|
| May 8, 2023 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Apr 26, 2023 | Do pass, but first be re-referred to the Committee on [Appropriations] | Senate Standing Committee on Education |
Passed |
|
| Apr 17, 2023 | Do pass, but first be re-referred to the Committee on [Education] | Senate Standing Committee on Human Services |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Alemeda County Office of Education | * Support | Jul 12, 2023 |
| Allies for Every Child | ** Support | |
| California Alliance Of Child And Family Services | * Support | Jul 12, 2023 |
| California Alternative Payment Program Association | ** Support | |
| California Association for the Education of Young Children | ** Support | |
| California Catholic Conference | ** Support | |
| California Child Care Resource and Referral Network | ** Support | |
| California Childcare Law Center | * Support | Apr 17, 2023 |
| California Commision on the status of Women and Girls | * Support | Jul 12, 2023 |
| California Family Child Care Network | ** Support | |
| California Legislative Women's Caucus | ** Support | |
| California Strategies & Advocacy, LLC | ** Support | |
| California Work & Family Coalition | ** Support | |
| Caring Across Generations | ** Support | |
| Catalyst California | ** Support | |
| Child Action, Inc. | ** Support | |
| Child Care Alliance of Los Angeles | ** Support | |
| Child Care Law Center | ** Support | |
| Childcare Providers United | ** Support | |
| Childcare Resource Center | * Support | Jul 12, 2023 |
| Children Now | * Support | Jul 12, 2023 |
| Children of the Rainbow | * Support | Jun 20, 2023 |
| Children's Bureau of Southern California | ** Support | |
| Circle of Friends Child Care Center | ** Support | |
| City & County of San Francisco | * Support | Jul 12, 2023 |
| City Of Goleta | * Support | Jul 12, 2023 |
| City of Golita | ** Support | Jun 20, 2023 |
| Coalition of California Welfare Rights Organizations | ** Support | |
| County Of San Diego | * Support | Jul 12, 2023 |
| County Of Santa Clara | * Support | Jul 12, 2023 |
| Crystal Stairs | ** Support | |
| Crystal Stairs, Inc. | ** Support | |
| Early Care and Education Coalition | * Support | Jul 12, 2023 |
| Early Edge California | ** Support | |
| Edvoice | ** Support | |
| Equal Rights Advocates | ** Support | |
| EveryChild California | ** Support | |
| Everychild Foundation | ** Support | |
| Family Violence Appellate Project | ** Support | |
| First 5 Los Angeles | * Support | Jul 12, 2023 |
| First 5 Orange County | ** Support | |
| First 5 Riverside County | ** Support | |
| Friends Committee On Legislation Of California | ** Support | |
| Good2know Partners | ** Support | |
| GRACE Institute - End Child Poverty in California | ** Support | |
| Head Start California | ** Support | |
| John Burton Advocates for Youth | ** Support | |
| Kern County Superintendent of Schools Office | ** Support | |
| Kidango | ** Support | |
| KinderCare | * Support | Apr 17, 2023 |
| Kindercare Learning Companies | ** Support | |
| LA Best Babies Network | ** Support | |
| Los Angeles County Office Of Education | * Support | Jul 12, 2023 |
| Los Angeles County Superintendent Of Schools | * Support | Apr 26, 2023 |
| Low Income Investment Fund | ** Support | |
| Marin Family Child Care Association | ** Support | |
| Mendocino County Office Of Education | * Support | Jun 20, 2023 |
| Mission Child Care Consortium | ** Support | |
| National Council of Jewish Women-California | ** Support | |
| National Women's Political Caucus of California | ** Support | |
| National Women’s Political Caucus - Pomona/inland Empire | ** Support | |
| Oakland Starting Smart and Strong | ** Support | |
| Options for Learning | ** Support | |
| Our Family Coalition | ** Support | |
| Parent Voices California | ** Support | |
| Public Counsel | ** Support | |
| Regional Economic Association Leaders Coalition | ** Support | |
| Riverside County Public K-12 School District Superintendents | ** Support | |
| Riverside County Superintendent of Schools | * Support | Jul 12, 2023 |
| San Diego County Of | ** Support | |
| San Diego Foundation | ** Support | |
| San Francisco Department of Early Childhood | ** Support | |
| Santa Barbara County | * Support | Jun 20, 2023 |
| Santa Clara Board of Supervisors | * Support | Apr 17, 2023 |
| Santa Clara County Board of Supervisors | * Support | Apr 26, 2023 |
| Santa Clara County Office Of Education | * Support | Jul 12, 2023 |
| Santa Clara County School Boards Association | ** Support | |
| Silicon Valley Community Foundation | ** Support | |
| Small Business Majority | ** Support | |
| The Education Trust - West | ** Support | |
| Thriving Families California | * Support | Jul 12, 2023 |
| Unite-LA | ** Support | |
| United Ways Of California | ** Support | |
| Untitled No. 1 School | ** Support | |
| Value Schools | * Support | Apr 26, 2023 |
| Wu Yee Children's Services | ** Support | |
| YMCA of San Diego County | ** Support |
Date of Hearing: June 26, 2024
ASSEMBLY COMMITTEE ON EDUCATION
Al Muratsuchi, Chair
SBPCA Bill Id:SB 380
Author:(Limón) – As Amended Ver:June 10, 2024
SENATE VOTE: Not relevant
SUBJECT: California state preschool programs: age of eligibility
SUMMARY: Authorizes California state preschool program (CSPP) contractors to enroll two-year-old children until July 1, 2027, and requires the California Department of Education (CDE) to ensure that the rate contractors receive to serve 2-year-old children is no less than the rate provided for children of the same age served in the general child care and development program. Specifically, this bill:
- Authorizes, but does not require, CSPP contractors to enroll eligible two-year-old children in full-day or part-day CSPP until July 1, 2027.
- Specifies that a two-year-old child is eligible for a part-day CSPP if the CSPP has chosen to enroll two-year-old children and the family meets current eligibility requirements.
- Specifies that a two-year-old child is eligible for a full-day CSPP if the CSPP has chosen to enroll two-year-old children and the family meets current eligibility and need for service requirements.
- Requires CSPP facilities to be licensed under Title 22 and prohibits a local educational agency (LEA) from operating a license-exempt CSPP to serve children under 4 years of age.
- Requires the Superintendent of Public Instruction (SPI) to develop guidance for contractors to follow when enrolling two-year-old children, and authorizes the SPI to issue the guidance through management bulletins or letters of instruction pending the development of regulations.
- Clarifies that the existing adjustment factor of 1.8 for serving children 47 months of age or younger, is applied to two-year-old and three-year-old children.
- Requires the CDE to ensure that the rate provided to CSPP contractors serving two-year-old children is no less than the applicable rate provided for children of the same age served in the general childcare and development programs (CCTR) in each county.
- Prohibits a CSPP contractor from serving any two-year-old children after July 1, 2027, unless the children were being served before that date, and makes all other provisions related to serving two-year-old children inoperative as of that date.
- Adds two-year-old children to existing eligibility and priority provisions for three-year-old and four-year-old children.
- Defines “two-year-old children as those who have had their second birthday and do not otherwise meet the definition of three-year-old children.”
EXISTING LAW:
- Establishes the Early Education Act, to be administered by the CDE, and provides that the programs shall include, but not be limited to, part-day age and developmentally appropriate programs designed to facilitate the transition to kindergarten for three- and four-year-old children in educational development, health services, social services, nutritional services, parent education and parent participation, evaluation, and staff development. (Education Code (EC) Section 8207)
- Establishes eligibility for three-year-old and four-year-old children for preschool programs administered by the CDE and requires the SPI to adopt rules and regulations on eligibility, enrollment, and priority of services needed for implementation. (EC 8208)
- Specifies that in order for three- or four-year-old children to be eligible for part-day CSPP, families must meet at least one of the following eligibility criteria:
- A current aid recipient;
- Income eligible;
- Homeless;
- One whose children are recipients of child protective services, or whose children have been identified as being abused, neglected, or exploited, or at risk of being abused, neglected, or exploited; or
- One who has a member of its household certified to receive benefits from specified means-tested government programs. (EC 8208)
- Specifies that a three- or four-year-old child is eligible for full-day CSPP if the family meets one of the criteria in (3) and the family needs the childcare services for either of the following reasons:
- Because the child is identified by a legal, medical, or social services agency, an LEA liaison for homeless children and youth, a Head Start program, or an emergency or transitional shelter as a recipient of protective services, or is being neglected, abused, or exploited, or is at risk of neglect, abuse or exploitation, or is homeless; or
- Because the parents are engaged in: vocational training leading directly to a recognized trade, paraprofession, or profession; engaged in an educational program for English learners, or to attain a high school diploma or general educational development certificate; employed or seeking employment; seeking permanent housing for family stability; or incapacitated. (EC 8208)
- Authorizes a part-day CSPP to provide services to children in families whose income is no more than 15% above the income eligibility threshold after all eligible three- and four-year-old children have been enrolled. Specifies that no more than 10% of children enrolled may be from families above the income threshold. (EC 8208)
- Requires, until June 30, 2025, CSPP contractors to reserve at least 5% of enrollment for children with exceptional needs; 7.5% as of July 1, 2025; and 10% as of July 1, 2026, and specifies that contractors not meeting these thresholds may be put on conditional contracts. (EC 8208)
- Authorizes a part-day CSPP to enroll three- and four-year-old children with additional exceptional needs (beyond those enrolled pursuant to (6) above) from families above the income threshold after all eligible children have been enrolled, and specifies that these children do not count toward the 10% cap on over-income families. (EC 8208)
- Authorizes a full-day CSPP, after all eligible children have been enrolled, to enroll three- and four-year-old children from families who do not meet one of the requirements in (4)(ii) above. (EC 8208)
- Authorizes a provider of a CSPP operating within the attendance boundary of a public school, not including a charter or magnet school, where at least 80% of enrolled pupils are eligible for free or reduced-price meals, to enroll four-year-old children from families not meeting other eligibility requirements, as specified, with priority given to the lowest income families first. (EC 8217)
- Defines "income eligible" as a family whose adjusted monthly income is at or below 100% of the State Median Income (SMI), adjusted for family size, and adjusted annually. For purposes of establishing ongoing eligibility, a family’s adjusted monthly income must be at or below 100% of the SMI, adjusted for family size. Requires the Department of Finance (DOF) to calculate the applicable SMI by family size annually and provide the updated data to the CDE by March 1 of each year. (EC 8213)
- Requires that, upon establishing initial eligibility, a family be considered eligible for CSPP services for no less than 24 months before having their eligibility or need recertified. (EC 8208)
- Requires CSPP contractors to admit children to a full-day program based upon the following priorities, in order:
- Three-year-old and four-year-old children who are recipients of child protective services or who are at risk of being neglected, abused, or exploited, as specified;
- Three-year-old and four-year-old children with exceptional needs from families with incomes below the income threshold;
- Eligible three-year-old or four-year-old children who are not enrolled in a transitional kindergarten (TK) program, in order of lowest income first;
- Children from families with income no more than 15% above the income eligibility threshold, with priority to children with exceptional needs, and then to four-year-old children, followed by three-year-old children;
- Children with exceptional needs from families above the income eligibility threshold, with priority to four-year-old children, followed by three-year-old children; and
- For a program operating within the attendance boundary of a high-poverty school, any other three-year-old or four-year-old child, as per (8) above. (EC 8211 and 8212)
- Requires families to be assessed a single flat monthly fee for all state subsidized early childhood services received, including full-day CSPP, and requires that the SPI use the fee schedule developed in conjunction with the California Department of Social Services (CDSS). (EC 8252)
FISCAL EFFECT: Unknown
COMMENTS:
Need for the bill. According to the author, “SB 380 will expand California State Preschool eligibility to children as young as 2 years of age. This will allow providers to serve more children and have more flexibility to serve the needs of their community. Getting children into preschool earlier can also promote continuity of care, helping the youngest learners build confidence and improve educational outcomes.”
California has a complex system of early childhood programs. California’s subsidized early care and education (ECE) is made up of a complex system of programs serving children from birth through 13 years, funded through a mix of federal and state dollars, and administered through a mixed delivery system by LEAs, community-based providers, and family childcare providers including, but not limited to:
- General Childcare and Development (CCTR) Programs include center-based or family childcare home care, providing part or full-time care for children from 0-5 years and out-of-school care for school age children up to age 13 from income eligible families who have a need for care;
- Alternative Payment Programs (APP) provide voucher-based childcare subsidies to low-income parents to access childcare through a wide range of providers. Includes vouchers offered through California’s state welfare program, California Work Opportunity and Responsibility to Kids (CalWORKs), those for working families, as well as programs specifically for migrant children;
- CSPP provides center-based preschool for 3- and 4-year-old children from income eligible families or who are otherwise eligible;
- Family Childcare Home Education Networks (FCCHENs) provide childcare and development services, including preschool, in family childcare home settings. CDE contracts with FCCHEN contractors to provide ongoing training and support to network providers in order to assist these family childcare home providers in offering early education and child care to eligible families with children ages birth through 13 years of age; and
- Head Start and Early Head Start are federally-funded preschool and child development programs serving children from families with incomes below the federal poverty level and offer education, childcare, extensive family engagement, and wraparound services.
These programs offered a total of 713,300 slots in the 2022-23 fiscal year, as noted below.
Program | Total # of slots in 2022-23 |
Full-day CSPP | 69,000 |
Part-day CSPP | 142,000 |
TK | 120,000 |
APP | 161,300 |
CCTR | 78,500 |
CalWORKs Stages 1-3 | 127,800 |
Other | 14,700 |
Total | 713,300 |
Source: Legislative Analyst Office (LAO), 2023
Enrollment in CSPP has not returned to pre-pandemic levels. Despite the availability of over 200,000 CSPP slots, as noted above, the level of enrollment in CSPP has not fully recovered from the impacts of the COVID-19 pandemic, among other factors. Total enrollment in CSPP by three- and four-year-old children dropped from approximately 140,000 in 2019 to 95,733 in 2022, as shown below:
Source: California Budget and Policy Center, 2024
Some of the factors impacting the drop in CSPP enrollment have been identified as:
- Workforce challenges that limit providers’ ability to staff classrooms;
- The long-lasting impacts of the pandemic;
- 4-year-old children moving to TK;
- Programs may not meet families’ needs (e.g., inconvenient hours or location); and
- Families facing access challenges, such as not having enough information about the program. (California Budget and Policy Center, 2024)
Transitional Kindergarten serves four-year-olds. TK is the first year of a 2-year kindergarten program. California’s Kindergarten Readiness Act of 2010 revised the cutoff date by which children must turn 5 for kindergarten entry in that year. The act established September 1 as the new kindergarten eligibility date, 3 months earlier than the previous date of December 2. The Kindergarten Readiness Act also established TK for all students affected by the birthdate eligibility change. Instead of enrolling in regular kindergarten, students who reach age 5 between September 2 and December 2 receive an “age and developmentally appropriate” experience in TK prior to entering kindergarten the following year. The Budget Act of 2021 expanded access to early education for four-year-olds by requiring that all LEAs offer a TK program to all eligible children by the 2025-26 school year.
The expansion of TK impacts CSPP providers. As universal TK is rolling out, the impact is reducing the number of four-year-olds enrolling in CSPP. However, neither TK nor kindergarten is mandatory in California, thus not all eligible four-year-olds will be enrolled in TK. Some families may choose to have their children remain in CSPP or another childcare program that better meets their needs for full-day and full-year care or provides care during non-traditional hours. The Budget Act of 2021 also authorizes CSPP providers to offer wraparound care for children enrolled in TK, during the hours they are not enrolled in TK.
Concerns have been raised about the impact of an expansion of TK on CSPP providers, particularly those community-based providers not affiliated with an LEA. If sufficient numbers of 4-year-olds are enrolled in TK rather than CSPP, the CSPP contractors could experience significant drops in enrollment, jeopardizing their ability to earn their contracts or to remain open. CSPP contracts held by LEAs may be relinquished if the LEA determines that operating a TK program is more financially viable than a CSPP. The loss of full-day, full-year CSPP programs could negatively impact parent choice and the ability of parents to find care that best meets the needs of the child and family.
Another factor cited by CSPP contractors is the disparity in the costs of serving preschool age children versus infants and toddlers due to the differing ratio requirements, which impact staffing costs. Contractors note that the revenues associated with serving 4-year-olds contribute to offsetting the higher costs associated with caring for infants and toddlers. They express concern that without a sufficient number of 4-year-olds in their programs, the programs will not be financially viable in serving infants and toddlers, further exacerbating the shortage of infant and toddler childcare slots.
Small fraction of eligible children receive subsidized care. According to the CDE, in the 2021-22 fiscal year, 62% of three- and four-year-olds in California were eligible for CSPP. Of those eligible, only 8.5% of eligible three-year-olds and 22% of eligible four-year-olds were served. The total number of income-eligible children served in either CSPP or Head Start represented 20.9% of three-year-olds and 27% of four-year-olds.
Enrollment in TK does not require income eligibility as it is being made available to all four-year-old children in a phased-in approach based upon the month of their birthday. In 2021-22, 75,465 children, or 62% of eligible children, participated in TK. It is estimated that at full implementation in 2025-26, between 65-80% of all four-year-olds will participate in TK, representing between 291,000 and 358,200 children.
Clear need for additional infant and toddler childcare. Researchers report that children begin learning at birth, and every interaction that young children have with a caregiver adds to their experiences and influences the rapid brain development that occurs in the first few years of life. The ability of families to access childcare programs staffed by highly skilled and experienced teachers can have a major impact on children’s cognitive development. Nearly 1 in 5 infants in the U.S. live in poverty, leaving them at risk of falling behind before they can walk. The toxic stress associated with poverty can limit young children’s exposure to positive interactions and harm brain development. Research shows that gaps in children’s cognitive abilities by income are evident as early as 9 months and significantly widen by the age of 2.
According to data provided by the American Institutes for Research, the Child Care Resource Center reports that only 9.1% of eligible two-year-olds and 6.5% of one-year-olds are served in subsidized care in California. This bill would propose to serve more two-year-old toddlers in subsidized care by authorizing CSPP contractors to serve these younger children within their contracts.
Related legislation. SB 1047 (Limón), Chapter 923, Statutes of 2022, expands, from 12 months to 24 months, the period of a family’s eligibility after establishing initial eligibility for CSPP and other subsidized childcare and development programs, and expands priority for eligibility, enrollment, and services to include families who receive specified human services benefits.
SB 50 (Limón) of the 2021-22 Session would have expanded the range of types of childcare and early learning services that a CSPP contracting agency may provide. This bill was vetoed by the Governor with the following message:
Expanding access to high quality early learning and care for babies and toddlers is a priority for my Administration. That's why I worked to make universal TK a reality, strengthen our paid family leave policies, and expand childcare slots for children in California. Unfortunately, the timing of this bill is premature as it presupposes how the State Preschool Program will be modified to account for the implementation of universal TK. Next January, modifications will be proposed to the State Preschool Program in the 2022 Budget to align the program with the Master Plan for Early Learning and Care. I appreciate the author's leadership on this issue and look forward to working with her on improving the State Preschool Program and serving more of California's youngest children.
AB 92 (Reyes) of the 2021-22 Session would have made changes to the amount of the family fee collected for preschool and childcare and development services by prohibiting family fees from exceeding 1% of a family’s monthly income, exempting families with a monthly income below 75% of the state median income from paying a family fee, and prohibited providers from absorbing any reduction in pay due to waivers or reductions in family fees. This bill was vetoed by the Governor with the following message:
The author's advocacy for California's working families is commendable. Like the author, expanding access to high quality early learning and care programs for babies and toddlers is a priority of my Administration. That's why the 2022 Budget Act included significant investments in preschool and childcare including family fee waivers for the 2022-23 fiscal year, an income threshold increase for the State preschool program from 85 percent to 100 percent of state median income, and funding to allow providers to stay open even if enrollment is down due to COVID-19.
While the intent of this bill is consistent with our previous budget actions, it creates costs in the tens of millions of dollars not currently accounted for in the state's fiscal plan. With our state facing lower-than-expected revenues over the first few months of this fiscal year, it is important to remain disciplined when it comes to spending, particularly spending that is ongoing. We must prioritize existing obligations and priorities, including education, health care, public safety and safety-net programs.
SB 976 (Leyva) of the 2021-22 Session would have renamed CSPP as Universal Preschool and expressed the intent of the Legislature to provide access to free universal preschool to all families regardless of family income, subject to an appropriation for this purpose, through a mixed-delivery system; authorized individual family childcare home providers and Head Start agencies to offer universal preschool; required the convening of a stakeholder council on universal preschool; removed the requirement for the levying of family fees within the universal preschool program; required that financial support be provided to current and aspiring preschool staff in obtaining required credentials and degrees; and expanded the scope of services provided to families by resource and referral agencies (R&Rs). This bill was held in the Assembly Education Committee.
SB 89 (Committee on Budget and Fiscal Review) Chapter 24, Statutes of 2020, authorizes the transfer of child care and development programs, other than CSPP, currently administered by the CDE to the DSS effective July 1, 2021.
AB 123 (McCarty) of the 2019-20 Session would have established the Pre-K for All Act; expanded the eligibility for CSPP; increased the reimbursement rate for the CSPP and required a portion of the increase to be used to increase teacher pay; required CSPP lead teachers to hold a bachelor’s degree by a specified date; and established a program to provide financial support to childcare workers pursuing a bachelor’s degree. This bill was held in the Senate Appropriations Committee.
AB 167 (Rubio) of the 2019-20 Session would have created the “California Partnership for Infants and Toddlers” to provide grants to specified providers serving infants and toddlers, subject to an appropriation if they agreed to meet specified standards and to provide full-day, full-year care. Also stated legislative intent to provide funding to provide childcare for an additional 20,000 infants and toddlers. This bill was held in the Assembly Appropriations Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
None on file
Opposition
None on file
Analysis Prepared by: Debbie Look / ED. / (916) 319-2087
Date of Hearing: July 12, 2023
ASSEMBLY COMMITTEE ON EDUCATION
Al Muratsuchi, Chair
SBPCA Bill Id:SB 380
Author:(Limón) – As Amended Ver:June 26, 2023
[Note: This bill was double referred to the Assembly Human Services Committee and was heard by that Committee as it relates to issues under its jurisdiction.]
SENATE VOTE: 39-0
SUBJECT: Early learning and care: rate reform
SUMMARY: Requires the Department of Social Services (DSS), in collaboration with the California Department of Education (CDE), to develop an alternative methodology for calculating subsidy payment rates for childcare and development services using a cost estimation model; requires the DSS to seek approval from the federal government to implement an alternative methodology; requires that any funding provided in the Budget Act of 2023 to increase reimbursement rates be distributed using an interim transition plan until the alternative methodology is adopted; ensures providers of childcare services are reimbursed based upon enrollment or authorized hours of care, rather than enrollment; and prohibits the collection of family fees until an equitable sliding scale is implemented. Specifically, this bill:
- Expresses the intent of the Legislature that this bill implements the recommendations of the Rate and Quality Workgroup, established by the Budget Act of 2021, to create a new subsidy payment rate structure for childcare and development and preschool programs.
- Requires the DSS, in collaboration with the CDE, to develop an alternative methodology for calculating subsidy payment rates for childcare and development services, including CSPP, and requires the alternative methodology to build on the recommendations of the workgroup and be aligned to the recommendations of the Joint Labor Management Committee (JLMC).
- Requires the alternative methodology to use a cost estimation model that includes all of the following:
- Current statutory and regulatory requirements for each program;
- Staff salaries and benefits;
- Training and professional development;
- Curricula and supplies;
- Group size and ratios;
- Enrollment levels;
- Facilities and other costs; and
- Family engagement.
- Requires the DSS, in collaboration with the CDE, to seek approval from the United States Department of Health and Human Services to amend the state’s current Child Care and Development Fund (CCDF) State Plan to change its current methodology for determining childcare and development and preschool subsidy payment rates to an alternative methodology. Requires this application to be submitted no sooner than 30 days after notification in writing to the Joint Legislative Budget Committee or whatever lesser time is agreed upon.
- Requires, if necessary, the two departments to develop an interim transition plan to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act, and requires them to fully implement the alternative methodology by the 2027-28 fiscal year, no sooner than 30 days after notification in writing to the chairperson of the Joint Legislative Budget Committee, or whatever lesser time the chairperson of the joint committee determines is appropriate. Requires these provisions to become operative on the date they notify the Legislature in writing that they have adopted the alternative methodology, as specified.
- Requires that any funding provided in the Budget Act of 2023 to increase reimbursement rates be distributed using the interim transition plan until the alternative methodology is adopted.
- Requires the DSS, in collaboration with the CDE, to review and update the alternative methodology every three years.
- Requires a contracting agency operating a CSPP to be reimbursed based upon enrollment, rather than attendance, by specifying that reimbursement is to be based upon 100% of the contract’s maximum reimbursable amount, or net reimbursable program costs, whichever is less, and requires that family childcare home education networks (FCCHENs) operating CSPPs be reimbursed based upon the maximum certified hours of care for all families certified for a variable schedule, regardless of a child’s attendance.
- Prohibits the collection of family fees for families with children enrolled in full-day CSPP until the new equitable sliding scale is established and implemented, as specified.
- Requires that childcare providers operating programs overseen by the DSS, including license-exempt providers, be reimbursed based on a family’s certified hours of need, as determined by the maximum certified hours of care, including those on a variable schedule, regardless of a child’s attendance.
- Requires that providers operating a General Childcare Program be reimbursed at 100% of the contract maximum reimbursable amount or the net reimbursable program costs, whichever is less.
- Requires the DSS, in consultation with the CDE, to develop an equitable sliding scale for the payment of family fees, and prohibits the collection of family fees for childcare and development programs, including CSPP, until the new sliding scale is implemented.
EXISTING LAW:
- Establishes the “Child Care and Development Services Act” to provide childcare and development services as part of a comprehensive, coordinated, and cost-effective system serving children from birth to 13 years old and their parents, including a full range of supervision, health, and support services through full- and part-time programs. (Welfare and Institutions Code (WIC) 10207 et seq.)
- Defines “childcare and development services” to mean services designed to meet a wide variety of children’s and families’ needs while parents and guardians are working, in training, seeking employment, incapacitated, or in need of respite, and states that these services may include direct care supervision, instructional activities, Resource and Referral (R&R) programs, and AP arrangements. (WIC 10213.5)
- Establishes the Early Education Act to provide an inclusive and cost-effective preschool program that provides high-quality learning experiences, coordinated services, and referrals for families to access health and social-emotional support services through full and part-day programs. (Education Code (EC) 8201)
- Defines “income eligible” for purposes of establishing initial income eligibility for the CSPP as meaning that a family’s adjusted monthly income is at or below 100% of the State Median Income (SMI), adjusted for family size, and for other childcare programs at 85% of the SMI. (EC 8213, WIC 10271.5)
- Identifies adjustment factors by which reimbursement rates to certain CSPP and childcare providers may be adjusted, as specified. (EC 8244, WIC 10281.5)
- Establishes the Standard Reimbursement Rate (SRR) beginning July 1, 2021 at $12,888, or $12,968 for full-day CSPP and $5,621 for part-day CSPP, and requires, beginning with the 2022-23 fiscal years, that the SRR be increased by a cost of living adjustment (COLA), as specified. Requires that beginning January 1, 2022, contractors receiving the SRR be reimbursed for the greater of the 75th percentile of the 2018 Regional Market Rate (RMR) survey or the contracted per child reimbursement rate as of December 31, 2021, as increased by the COLA. (EC 8242)
- Establishes, beginning January 1, 2022, the Regional Market Rate (RMR) ceilings at the greater of the 75th percentile of the 2018 RMR survey for that region or the RMR ceiling that existed in that region on December 31, 2021. (WIC 10374.5)
- Requires the Governor and the Child Care Providers Union (CCPU), consistent with the agreement dated June 25, 2021, to establish a JLMC to develop recommendations for a single reimbursement rate structure that addresses quality standards for equity and accessibility while supporting positive learning and developmental outcomes for children. Further, requires the JLMC to develop recommendations and present the recommendations to the Department of Finance (DOF) no later than November 15, 2022 in order to inform the Governor’s proposed budget for the 2023-24 fiscal year. (WIC 10280.2)
- Requires the DSS, in consultation with the CDE, to convene a working group separate from the JLMC to assess the methodology for establishing reimbursement rates and the existing quality standards for childcare and development and preschool programs, as specified. Further, requires the workgroup to, no later than August 15, 2022, provide recommendations, including, but not limited to, recommendations on how the DSS should define childcare workforce competencies and how these competencies would align with rate reform, to the JLMC, DOF, and the Joint Legislative Budget Committee. (WIC 10280.2)
- Requires that families enrolled in subsidized childcare and development programs, including full-day CSPP, be assessed a single flat monthly fee at initial enrollment and reassessed at recertification, but prohibits the collection of family fees for the 2022-23 fiscal year.
FISCAL EFFECT: According to the Senate Appropriations Committee:
- CDE estimates unknown costs for rate increases from transitioning to the alternative rate methodology. CDE estimates that waiving family fees would cost approximately $30.8 million annually ($16.3 million in Proposition 98 and $14.5 million of non-Proposition 98 funding), and that funding would be necessary to cover the cost of waived family fees. CDE estimates costs of $1,821,000 in 2024-25, $1,816,000 in 2025-26, and $316,000 in 2026-27 and ongoing thereafter for state administration (General Fund).
- Unknown, potentially significant costs for DSS-administered programs, related to rate increases, waiving family fees, and state administration.
COMMENTS:
Addressing the need to revise the childcare reimbursement system. This bill would build upon the recommendations made by these stakeholder workgroups and would implement an alternative methodology for reimbursing childcare providers. In adopting an alternative methodology, this bill seeks to reimburse childcare providers for the true cost of care while also ensuring families in California have access to quality childcare. Specifically, this bill requires the DSS, in consultation with the CDE, to develop an alternative methodology for calculating subsidy payment rates for childcare and CSPP services.
This bill would also require a new, equitable sliding scale for collecting family fees to be developed, and would prohibit family fees from being collected until the sliding scale is implemented in order to prevent families who rely on subsidized childcare from shouldering the costs of care.
Need for the bill. According to the author, “SB 380 will help childcare providers and families by transitioning providers to a single cost-based reimbursement rate, suspending family fees until an equitable sliding scale for family fees is established, and funding providers using an enrollment-based contract earning mechanism. This bill is a key opportunity to prioritize and support California’s youngest children and their families.
California must make a multi-year commitment to adopting rate reform and provide an immediate down payment to address California’s childcare crisis. Suspending family fees is an efficient anti-poverty solution that has already proven successful during the pandemic. It is time for the Legislature and this administration to fix the childcare crisis and transform childcare and early learning in California to ensure young children and families can thrive.
This bill will require the DSS to apply to the federal Health and Human Services agency to amend the State’s current Child Care Development Fund state plan to change reimbursement rates to an alternative methodology, including a cost-based model that is consistent with the recommendations of the CDSS led Rate and Quality Workgroup report and the JLMC. This bill also evaluates the cost of providing care by considering current statutory and regulatory requirements, staff salaries, training, supplies, ratios, enrollment levels, facilities, and family engagement. The bill will require that this methodology be updated regularly to account for rising costs in care.”
California has a complex system of early childhood programs. California’s subsidized early care and education (ECE) is made up of a complex array of programs serving children from birth through 13 years, funded through a mix of federal and state dollars, and administered through a mixed delivery system by local educational agencies (LEAs) and community-based providers. The major ECE programs include, but are not limited to, the following:
Program | Overseen by | Ages of children served | # of slots in 2022-23 |
Full-day state preschool (CSPP) | CDE | 3-4 years | 69,000 |
Part-day preschool (CSPP) | CDE | 3-4 years | 142,000 |
Transitional kindergarten (TK) | CDE | 4-5 years | 120,000 |
Alternative Payment (AP) | DSS | 0-13 years | 161,300 |
General Childcare (CCTR) | DSS | 0-13 years | 78,500 |
CalWORKs Stages 1-3 | DSS | 0-13 years | 127,800 |
Source: Legislative Analyst Office (LAO), 2023
According to the LAO, since 2021-22, the state has added 146,600 childcare slots, which has more than doubled the number of slots statewide. California had approximately 560,000 licensed center spaces for all children from birth to 6 years, and 268,000 licensed family childcare home spaces for all children from birth to 12 in 2021. California still lacks the licensed capacity to meet the need for childcare and preschool services.
Reimbursement for childcare is complex. Subsidized childcare providers in California are reimbursed based upon either the Regional Market Rate (RMR) or the Standard Reimbursement Rate (SRR):
- RMR. Voucher-based programs, including CalWORKs and the APP, are required to follow Title 22 health and safety regulations and are reimbursed based upon the RMR. In California the RMR survey collects data about the prices that early learning and care programs charge for nonsubsidized care, in addition to other information. This information is then used by the Legislature to determine the reimbursement ceilings for each county, determine ceilings across different early learning and care settings (e.g., centers, family child care homes), and used to determine ceilings based on other characteristics of the services provided (e.g., part-day, full-day, age group). Federal regulations require the use of the most recent survey in determining reimbursement ceilings, but states have flexibility in how they use the survey results. Specifically, states can set reimbursement ceilings at a certain percentile of the survey. As of June 2022, the reimbursement ceilings in California were based on the 2018 RMR survey, inclusive of a hold harmless provision.
- SRR. Until January 1, 2022, California used the SRR for most direct contract programs that follow Title 5 education quality standards in addition to Title 22. These include the CSPP and General Childcare. The SRR is specified in the annual Budget Act. The SRR was structured as a base rate with adjustment factors for length of service (hours enrolled per day) and specific populations (e.g., infants, children with severe disabilities, limited and non-English speaking). These adjustment factors were applied to the SRR on a per child basis. The SRR is a single statewide rate with no regional variation (e.g., $51.87 per day for CSPP just prior to the January 1, 2022, changes). The SRR was lower for some programs than the rate they would have received through the RMR, even though the SRR-reimbursed programs were required to meet additional educational program quality requirements in addition to licensing standards.
In 2021-22, the state shifted direct contract providers to the RMR to the extent the relevant RMR was higher than the SRR. The current weighted statewide average is $62.03 per child per day for full-day CSPP and $38.84 for part-day CSPP.
Childcare reimbursements failing to support quality childcare. The U.S. Department of the Treasury (DOT) notes that the following factors contribute to the market failure of early learning and care:
- Quality early learning and care services benefit society by supporting overall positive child development outcomes and supporting families’ abilities to work;
- Most families are unable to pay for the cost of quality early learning and care for their children;
- Early learning and care programs do not receive sufficient revenue, either by private fees collected from families or by the public subsidy system, to meet the true cost of providing quality care, having the impact of limiting the extent to which families can access care and learning opportunities for their children; and
- Early learning and care educators are underpaid. In part, this is because early learning and care educators are disproportionately women of color who are undervalued and underpaid in the labor market broadly.
The DOT goes on to describe how the federal and state governments contribute to the market failure in the reimbursement rate system:
- The current institutionalized structure for rate setting, using a RMR survey, sets rates based on prices charged to families, which programs often deflate based on families’ abilities to pay. This regionalized rate-setting structure institutionalizes low rates in low-income areas;
- Government subsidies and current levels of public investment fail to provide sufficient funding to cover the cost of providing quality early learning and care;
- Government has not invested sufficient funds to ensure families can afford child care;
- Early learning and care programs make ends meet by limiting the compensation and benefits provided to their staff or themselves;
- There is a shortage of licensed child care programs and early learning and care opportunities for the children and families that need them; and
- The impacts of these failures are disproportionately felt by low-income women of color, from the family fees they pay to utilize early learning and care services for their children to the low wages they receive when providing these services themselves.
Impacts of inadequate reimbursement rates on childcare workers. According to estimates by the Center for the Study of Childcare Employment at the University of California, Berkeley, there are approximately 116,800 members of the early learning and care workforce in California. The members of this workforce experience considerable inequities when examined by race, setting type, and job position.
Early educators must meet different requirements depending on the type of program/setting they work in. Research suggests that fewer women of color and fewer women who immigrated to the United States have access to higher education opportunities that lead to the educational qualifications required for higher paying roles. (Park, 2015) Barriers include cost, time and location of coursework, low rates of admission to public universities, and cultural and linguistic barriers.
In 2019, the median hourly wage in California was $13.41 for childcare workers and $16.83 per hour for preschool teachers, compared to $41.86 per hour for kindergarten teachers. Black and Latina early educators are more likely to earn lower wages than their White colleagues, and in California, 39% of White center-based staff earned less than $15 an hour, compared to 57% of African American staff and 59% of Latina staff. (McLean, 2021) Many segments of the early learning and care workforce in California do not receive health and retirement benefits, payment for personal or sick leave, or paid time off for planning, or professional development. The poverty rate for childcare workers in California is 17%, compared to 8.7% for California workers in general, and 2.5% for K-8 teachers. (Gould, 2020)
Actual costs of care. A key component of the childcare reimbursement rate conversation is that oftentimes the reimbursement rates paid to providers do not cover the true cost of care. Recent increases in inflation have resulted in higher costs to providers when purchasing the supplies necessary to maintain quality care, such as milk, baby formula, and baby wipes. A March 2023 brief from the Child Care Resource Center demonstrates that the cost of providing care for a preschooler in a full-time childcare center exceeds the current reimbursement rate and the 2018 rate when adjusted for inflation. For example, in San Bernardino County, the 75th percentile of the 2018 RMR survey equates to a rate of $983.03; when adjusted for inflation in 2023, this reimbursement rate should be $1,092. The brief notes that the monthly cost of care in the region is approximately $1,908.17, which results in a funding gap of $925.14 for providers in San Bernardino County. In Los Angeles County, this gap is $987.33, in Alameda County this gap is $717.05, and in Butte County, this gap is $537.30.
Childcare reimbursement rates have also lagged when compared to increases in the minimum wage. A March 2023 report from the California Budget & Policy Center notes that, while minimum wage has increased 55% from 2016-17 to 2022-23:
The rate ceilings for childcare providers across all 58 counties generally have not kept pace with the rising minimum wage after the most recent increase to payment rates enacted in 2021-22. In the state’s most populous county – Los Angeles – payment rates for licensed childcare centers for preschool-aged children increased by less than half as much as the statewide minimum wage. Providers in some counties, such as Riverside County, saw miniscule rate increases of less than 5%. And in 27 counties, due to weaknesses in the rate-setting methodology, licensed centers have not received a single rate increase for care for preschool-age children since 2016-17. Policymakers have not consistently updated the SRR each year so that contract providers can keep pace with rising staff costs and the increasing price of food and supplies. From 2016-17 to 2022-23, the SRR increased by 36.6%, falling short of the 55% increase in the state minimum wage.
Family fees and mixed income programs. The Childcare Development Fund (CCDF) – a federal funding stream that helps states cover the cost of certain childcare programs – requires states to establish a sliding fee scale for families that receive childcare services supported by federal funds. As such, some parents pay a fee to help cover the costs of needed care. These family fees are assessed based on income and family size, but cannot be based on the cost of care or the amount of subsidy payment that a family receives. Current law permits, at the state’s discretion, family fees to be waived for families who meet certain criteria, including families that have an income at or below the federal poverty level (FPL); the 2023 FPL for a family of three is $24,860. Beginning in April 2020, family fees have been waived in California for all families receiving subsidized childcare through the following actions:
- On April 4, 2020, Governor Newsom signed Executive Order N-45-20, which suspended family fees for a period of 60 days.
- SB 820 (Committee on Budget and Fiscal Review), Chapter 110, Statutes of 2020, later waived family fees for all subsidized children in July and August 2020, and included a waiver of family fees beginning September 1, 2020, through June 30, 2021.
- AB 131 (Committee on Budget), Chapter 116, Statutes of 2021, waived family fees for the 2021-22 Budget Year.
- AB 210 (Committee on Budget), Chapter 62, Statutes of 2022, extended the pause on collection of family fees for the 2022-23 fiscal year.
According to the DSS, approximately $88 million in family fees will be waived in the 2022-23 fiscal year. Currently, family fees are scheduled to resume on July 1, 2023; however, the provisions of this bill would prohibit the collection of family fees until the new, equitable sliding scale, as established by the provisions of this bill, is created and implemented. This bill does not define “equitable sliding scale.”
The early education trailer bill, AB 116 (Committee on Budget) that is currently on the Governor’s desk would extend the prohibition on the collection of family fees to October 1, 2023 and authorizes any family fees accrued but not collected prior to October 1, 2023 to be forgiven and not collected. It would also require that a CSPP contractor or other childcare provider not absorb a reduction in pay for the CSPP space or voucher due to the waiver or reduction in family fees. It would also require that the number of CSPP or childcare spaces not be reduced due to a reduction in the collection of family fees.
The trailer bill would also require, beginning October 1, 2023, family fees not exceed 1% of a family’s monthly income, and that families with incomes below 75% of the state median income (SMI) not be charged or assessed a family fee.
Improving California’s subsidized childcare system. In recent years, a number of working groups have examined subsidized childcare in California and made recommendations to reform and improve the system as it relates to equity, eligibility, and provider reimbursement rates.
- First 5 California Reimbursement Rate Workgroup. This group, which released its report in November 2018, recommended that California implement comprehensive rate reform by, among other things, incentivizing quality, using the RMR to reimburse all counties at a rate that considers regional economic costs, and conduct ongoing reviews of rate changes to understand their impacts on the childcare system and make adjustments as needed.
- Assembly Blue Ribbon Commission on Early Childhood Education. The Assembly Blue Ribbon Commission on Early Childhood Education (BRC) was established with the intent to “plan an early learning system that works for/meets the needs of children, families, and providers.” The BRC, consisting of members appointed from the Assembly and stakeholders, began its work in early 2017, holding quarterly hearings and establishing subcommittees. The final report, issued on April 1, 2019 included recommendations related to reimbursement rates and family fees:
- The BRC concurs with the multi-step recommendations of the Rates Working Group, convened by First 5 California, to implement comprehensive rate reform through a multi-step process. Their recommendations are moving towards a heavier emphasis on the true cost of providing quality childcare, preschool and early learning experiences and address equity issues by refining the RMR survey and future rate-setting methodologies.
- In the long-term, the reimbursement rates for Title 5 and 22 programs should include competitive compensation that increases with quality improvement.
- In the near term, the reimbursement rates for Family, Friend and Neighbor (FFN) should make the compensation floor the state minimum wage.
- Family payments for families at the lowest income level should be reduced to zero, and if a family contribution is required for a program, it should progressively rise as a share of family income.
- Master Plan for Early Learning and Care (Master Plan). The Budget Act of 2020 appropriated $5 million for a long-term strategic plan to provide a roadmap to comprehensive, quality, and affordable childcare and preschool for children from birth through age twelve, including a fiscal framework that provides for ongoing funding to significantly expand early learning and care in the state, including options to generate needed revenues and examine alternative funding streams. The final report was released in December 2020, and recommends the adoption of a tiered reimbursement rate with appropriate adjustments:
Adopting a new reimbursement rate structure provides an anchor to transform the early learning and care system around the key values of equity and quality. The current structure has multiple independent rates. It lacks cohesion. Moving to a tiered reimbursement rate would facilitate connections that are currently lacking and help clarify and encourage workforce development, a key factor in improving quality. California’s subsidy reimbursement structure shares some features in common with other states but differs most notably on reimbursing for higher quality.
The Master Plan goes on to say that adopting a rate structure that includes all state-subsidized
programs and funding would support:
- Equity: A unified approach would allow for a similar reimbursement given the program and child contexts—and the associated cost differential—regardless of the funding stream;
- Simplicity: A unified reimbursement structure would be less costly for the state to administer and for providers to manage; and
- Quality: Reimbursement rates would vary with key quality cost drivers such as the staff-child ratio and teacher qualifications, and would incentivize providers to adopt and maintain higher quality.
- UPK Mixed Delivery Quality and Access Workgroup. In September 2022, AB 185 (Committee on Budget), Chapter 571, Statutes of 2022, established the Universal Pre-K Mixed Delivery Quality and Access Workgroup in order to provide recommendations on best practices for increasing access to high-quality universal preschool programs for three- and four-year old children offered through a mixed-delivery model. The legislation required the workgroup to include key stakeholders, including: representatives from COEs; community-based organizations; TK programs; R&Rs; APPs; CCTR programs serving preschool-age children; and, private, center-based preschool providers, among others, as specified in current law.
The provisions of AB 185 required the workgroup to be established no later than December 1, 2022, and required the SPI, in consultation with the Director of the DSS, to provide a report to the Legislature and DOF no later than January 15, 2023. The Governor’s Budget of 2023 proposes to extend the deadline for the delivery of the workgroup’s report.
- CCPU’s JLMC reimbursement rate system recommendations. AB 131, Chapter 116, Statutes of 2021, required that California establish a JLMC comprising representatives of the State and of the Child Care Providers United Union (CCPU) to develop recommendations for a single reimbursement rate structure that addresses quality standards for equity and accessibility while supporting positive learning and developmental outcomes for children.
- Rate and Quality Workgroup (RQWG). Similarly, the RQWG, established by AB 131, Chapter 116, Statutes of 2021, and administered by CDSS, was formed. Members of the RQWG include representatives from CCPU, state-funded center-based contractors, childcare and development experts, family representatives, Head Start programs, Alternative Payment Programs (APP), and the administration. The RQWG was tasked with making recommendations to:
- Work toward equity as an outcome and implement equity as a process;
- Replace the current methodology for setting rates with an alternative methodology that would, among other things, set a living wage floor;
- Create a single rate structure to address historical inequities; and,
- Continuously reevaluate the rate-setting methodology to address equity and adjust for changing conditions and rising costs.
Among the final recommendations of the RQWG are the following:
- Use an alternative methodology instead of the current market rate survey to set base rates to compensate early learning and care providers for the cost of meeting current state requirements. The price of early learning and care in a broken market should no longer be the basis for setting reimbursement rates;
- Create a single rate structure that specifies base rates and is designed to address historical inequities; and
- Continuously evaluate the rate-setting methodology to address equity and adjust for changing conditions and rising costs.
What is an alternative methodology? The 2014 reauthorization of the Child Care and Development Block Grant (CCDBG) Act redefined federal requirements, and now states have two options for how they set rates:
- A statistically valid and reliable survey of the market rates for childcare services in the state that reflects variations in the cost by geographic area, type of provider, and age of child; or
- An alternative methodology, such as a cost estimation model.
An alternative methodology for rate setting may be a cost study or a cost estimation model. A cost study involves collecting data from providers about their current costs of operating a program that meets licensing standards as well as other quality standards, reflecting point-in-time data about provider costs.
A cost estimation model involves building a tool that is informed by provider data and that can run multiple scenarios to estimate the impact of several variables on cost, such as program characteristics (e.g., size and ages of children served), child populations served, program quality, and location in the state.
Any alternative methodology used in lieu of a market rate survey must be approved in advance by the federal Administration for Children and Families as part of the State’s Childcare Development Fund (CCDF) plan. Since, CCDF plans are submitted for approval every three years, the process of establishing rates using an alternative methodology can take multiple years. In California, the DSS now has overall responsibility for the CCDF.
The early education trailer bill, AB 116 (Committee on Budget) currently on the Governor’s desk, defines “alternative methodology” as a cost-based method, including a cost estimation model, on which to base payment rates, pursuant to federal regulation, as specified. The bill would also require the DSS, in collaboration with the CDE, to develop and conduct an alternative methodology, begin the process of data collection and analysis by July 1, 2023, and consult with the CDE on data collection, analysis, and methodology for preschool programs. The trailer bill also requires the alternative methodology to build on the recommendations of the working group and be aligned with the recommendations of the JLMC. It further requires, if the federal Administration for Children and Families does not approve the alternative methodology, the DSS to develop and conduct a market rate survey to establish reimbursement rates.
Urgent need for reimbursement rate increases. The RQWG, recognizing the urgency of the crisis in California’s childcare system, recommends that the state not wait for an alternative methodology approval from the federal government before raising current reimbursement rates. They recommend that the state invest more funding for reimbursement rates immediately as providers are struggling to maintain programs with current funding based upon 2018 market rates.
According to the Assembly Budget Committee floor report dated June 24, 2023, the 2023-24 state budget provides a total of up to $2.83 billion in one-time funds for childcare reimbursement increases: $1.673 billion from various federal and general fund sources one-time, and up to $1.158 billion Proposition 98 one-time, through the 2024-25 fiscal year to increase all childcare and preschool rates, subject to collective bargaining. It reduces family fees for childcare and preschool to 1% of total family income, for families making at least 75% of the SMI, beginning October 1, 2023, and appropriates $78.4 million from non-Proposition 98 General Fund and Proposition 98 General Fund.
Arguments in support. EveryChild California, a co-sponsor, writes: “SB 380 will help childcare providers and families by transitioning providers to a single cost-based reimbursement rate, suspending family fees until an equitable sliding scale for family fees is established, and funding providers using an enrollment-based contract earning mechanism. This bill is a key opportunity to prioritize and support California’s youngest children and their families.
The COVID-19 pandemic has only heightened the need for affordable childcare, especially for mothers, caregivers, and communities of color, mostly essential workers, who work in low-paid service industries and have borne the brunt of hardships during the pandemic. Working parents and childcare providers are the backbone of our economy. 97% of childcare workers are women. The vast majority are women of color. When we fail to pay them a dignified wage, we are upholding a system rooted in racism, sexism, and economic injustice.
California must make a multi-year commitment to adopting rate reform and provide an immediate down payment to address California’s childcare crisis. Suspending family fees is an efficient anti-poverty solution that has already proven successful during the pandemic. We urge you to address the childcare crisis and transform childcare and early learning in California to ensure young children and families can thrive.”
Related legislation. AB 596 (Reyes) of the 2023-24 Session is substantially similar to this bill.
AB 210 (Committee on Budget), Chapter 62, Statutes of 2022, extended provisions of the 2021 Budget Act enacted during the COVID-19 pandemic to waive family fees for childcare and create hold harmless policies for the 2022-23 fiscal year, including CSPP.
AB 92 (Reyes) of the 2021-22 Session would have made changes to the amount of family fees collected for preschool and childcare and development services and would have prohibited providers from absorbing any reduction in pay due to waivers in family fees. AB 92 was vetoed by Governor Newsom with the following message:
The author's advocacy for California's working families is commendable. Like the author, expanding access to high quality early learning and care programs for babies and toddlers is a priority of my Administration. That's why the 2022 Budget Act included significant investments in preschool and childcare including family fee waivers for the 2022-23 fiscal year, an income threshold increase for the State preschool program from 85% to 100% of state median income, and funding to allow providers to stay open even if enrollment is down due to COVID-19.
While the intent of this bill is consistent with our previous budget actions, it creates costs in the tens of millions of dollars not currently accounted for in the state's fiscal plan. With our state facing lower-than-expected revenues over the first few months of this fiscal year, it is important to remain disciplined when it comes to spending, particularly spending that is ongoing. We must prioritize existing obligations and priorities, including education, health care, public safety and safety-net programs.
AB 131 (Committee on Budget), Chapter 116, Statutes of 2021, among other things, established a Rate Reform workgroup to be convened by the DSS for recommendations on rate methodology and existing program standards, including licensing standards, quality and environmental standards, and workforce competencies. Further, required the workgroup to submit recommendations to the Legislature no later than August 15, 2022 in order to inform the Joint Labor Management Committee recommendations on a single reimbursement rate system.
SB 246 (Leyva) of the 2021-22 Session would have required the DSS to establish a single reimbursement rate for early learning and care programs, including variation for regional costs and quality adjustment factors. This bill was held in the Assembly Education Committee.
SB 174 (Leyva) of the 2019-20 Session would have required that specified providers of subsidized childcare be reimbursed based upon an updated RMR as of January 1, 2021; would have established the “Quality Counts California Pilot Reimbursement Program,” to provide higher reimbursement rates to APP providers for meeting certain quality standards. This bill was held in the Assembly Appropriations Committee.
AB 125 (McCarty) of the 2019-20 Session would have revised the state’s system and rates for reimbursing subsidized childcare and development programs to create a more uniform reimbursement system reflecting regional costs of care, and would have established the “Quality County California Pilot Reimbursement Program” as a pilot program to provide higher reimbursement rates to APPs for meeting certain quality standards. This bill was held in the Senate Appropriations Committee.
SB 820 (Committee on Budget and Fiscal Review), Chapter 110, Statutes of 2020, among other things, waived, from September 1, 2020, to June 30, 2021, family fees for specified subsidized early learning and care programs for families who are not receiving in-person services or who are sheltering-in-place due to COVID-19.
AB 86 (Committee on Budget and Fiscal Review), Chapter 48, Statutes of 2019, among other things, simplified family fees for families receiving state-subsidized child care by creating a process for the CDE to adopt a new fee schedule that will provide more predictable fees through a cost-neutral change to the current fee structure and required CDE to report family fees collected for preschool programs to the DOF.
AB 2125 (Ridley-Thomas) of the 2013-14 Session would have required the SPI to review the plan that establishes standards and assigns reimbursement rates for child care and development programs, and to submit recommendations for a single reimbursement system that reflects the actual current cost of child care based on the most recent regional market rate survey. This bill was held in the Senate Appropriations Committee.
REGISTERED SUPPORT / OPPOSITION:
Support
Alameda County Office of Education
Allies for Every Child
California Alliance of Child and Family Services
California Alternative Payment Program Association
California Association for The Education of Young Children
California Catholic Conference
California Family Child Care Network
California Legislative Women's Caucus
California Work & Family Coalition
Caring Across Generations
Catalyst California
Child Care Alliance of Los Angeles
Child Care Law Center
Child Care Providers United
Child Care Resource Center
Children Now
Children's Bureau of Southern California
City and County of San Francisco
City of Goleta
Coalition of California Welfare Rights Organizations
County of Santa Clara
Crystal Stairs
Early Care and Education Consortium
Early Edge California
Edvoice
Equal Rights Advocates
EveryChild California
Everychild Foundation
Family Violence Appellate Project
First 5 LA
First 5 Orange County
First 5 Riverside County
Friends Committee on Legislation of California
Good2know Partners
Grace Institute - End Child Poverty in California
Head Start California
John Burton Advocates for Youth
Kern County Superintendent of Schools Office
Kidango
Kindercare Learning Companies
LA Best Babies Network
Los Angeles County Office of Education
Low Income Investment Fund
Mission Child Care Consortium
National Women's Political Caucus of California
National Women’s Political Caucus - Pomona/inland Empire
Oakland Starting Smart and Strong
Office of the Riverside County Superintendent of Schools
Options for Learning
Our Family Coalition
Parent Voices California
Public Counsel
Regional Economic Association Leaders Coalition
Riverside County Public K-12 School District Superintendents
San Diego; County of
San Diego Foundation
San Francisco Department of Early Childhood
Santa Clara County Office of Education
Santa Clara County School Boards Association
Silicon Valley Community Foundation
Small Business Majority
The Education Trust - West
Unite-LA
United Ways of California
Untitled No. 1 School
Wu Yee Children's Services
YMCA of San Diego County
Opposition
None on file
Analysis Prepared by: Debbie Look / ED. / (916) 319-2087
Date of Hearing: June 20, 2023
ASSEMBLY COMMITTEE ON HUMAN SERVICES
Corey A. Jackson, Chair
SBPCA Bill Id:SB 380
Author:(Limón) – As Amended Ver:April 18, 2023
SENATE VOTE: 39-0
SUBJECT: Early learning and care: rate reform
SUMMARY: Requires the California Department of Social Services (CDSS), in consultation with the California Department of Education (CDE), to develop and implement an alternative methodology for calculating subsidy payment rates for childcare and California State Preschool Program (CSPP) services; requires an equitable sliding scale for the payment of family fees be developed; and prohibits family fees from being collected until the sliding scale is implemented. Specifically, this bill:
- States legislative intent that the provisions of this bill implement the recommendations of the Rate and Quality Workgroup (RQWG) to create a new subsidy payment rate structure for childcare and development and preschool programs.
- Makes inoperative, beginning on the date that CDE notifies the Legislature that CDE has adopted the alternative methodology established by the provisions of this bill, provisions of current law that require CDE, in collaboration with CDSS, to implement a reimbursement system that establishes reasonable standards and assigned reimbursement rates as specified below in 5). Further, repeals those provisions of existing law on January 1 of the following year following the date on which CDE notifies the Legislature that an alternative methodology has been adopted.
- Requires CDE, in collaboration with CDSS, to implement the alternative methodology for calculating reimbursement rates for CSPP to be developed by the provisions of this bill, and, further, makes this requirement operative on the date that CDE notifies the Legislature that the department has adopted the alternative methodology, as specified.
- Prohibits family fees for full-day preschool services from being collected until the new equitable sliding scale is established and implemented, as required by the provisions of this bill.
- Requires CDSS, in collaboration with CDE, to develop an alternative methodology for calculating subsidy payments for certain childcare services and CSPP, and, further, requires the alternative methodology to:
- Build upon the recommendations of the RQWG and be aligned with the Joint Labor Management Committee (JLMC), as defined in current law; and,
- Use a cost estimation model that includes all of the following:
- Program models that meet the current statutory and regulatory requirements for each program;
- Staff salaries and benefits;
- Training and professional development;
- Curricula and supplies;
- Group size and ratios;
- Enrollment levels;
- Facilities and other costs; and,
- Family engagement.
- Instructs CDSS to develop a transition methodology to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time and as funds are appropriated in the annual Budget Act.
- Requires, beginning in fiscal year 2027-28, CDSS to fully implement the alternative methodology.
- Requires any funding provided in the Budget Act of 2023 to increase reimbursement rates be distributed using the transition methodology established by the provisions of this bill and until the alternative methodology is adopted.
- Requires funding and subsidy payments to be based on enrollment of certified children with the contract rates set using the alternative methodology.
- Requires CDSS to review and update the alternative methodology every three years, and, further, requires CDSS to seek preapproval from the United States Department of Health and Human Services to amend the state’s current Child Care and Development Fund (CCDF) State Plan to change its current methodology for determining childcare and development and CSPP subsidy payment rates to an alternative methodology as specified above in 5).
- Makes inoperative certain provisions of existing law related to the current reimbursement system and family fees, as specified, as well as provisions of this bill related to the requirement that CDSS on the date that CDSS notifies the Legislature that CDSS has adopted the alternative methodology, and repeals those provisions as of January 1 of the following year.
- Makes operative, beginning on the date that CDSS notifies the Legislature that the department has adopted an alternative methodology, certain provisions of this bill that require CDSS, in consultation with CDE, to implement an alternative methodology for calculating subsidy payments rates as specified in 5).
- Requires CDSS, in consultation with CDE, to develop an equitable sliding scale for the payment of family fees, and, further, prohibits family fees from being collected until the new equitable sliding scale is implemented.
- Makes Legislative findings and declarations related to the assessment and revision of reimbursement rates for childcare and development and preschool programs.
EXISTING LAW:
- Transfers responsibility for specified childcare programs, other than the CSPP, from CDE to CDSS effective July 1, 2021. (Welfare and Institutions Code Section [WIC] 10203 et seq.)
- Establishes the “Child Care and Development Services Act” to provide childcare and development services as part of a comprehensive, coordinated, and cost-effective system serving children from birth to 13 years old and their parents, including a full range of supervision, health, and support services through full- and part-time programs. (WIC 10207 et seq.)
- States the legislative intent that all families have access to childcare and development services, through resource and referral where appropriate, and regardless of demographic background or special needs, and that families are provided the opportunity to attain financial stability through employment, while maximizing growth and development of their children and enhancing their parenting skills through participation in childcare and development programs. (WIC 10207.5)
- Defines “childcare and development services” to mean services designed to meet a wide variety of children’s and families’ needs while parents and guardians are working, in training, seeking employment, incapacitated, or in need of respite and states that these services may include direct care supervision, instructional activities, resource and referral programs, and alternative payment arrangements. (WIC 10213.5(j))
- Designates CDSS as the single state agency responsible for the promotion, development, and provision of care of children in the absence of their parents during the workday or while engaged in other activities which require assistance of a third party or parties, and, further, requires CDSS to administer the federal CCDF as defined in current federal law. (WIC 10211, 45 Code of Federal Regulations 98.2)
- Requires families to meet certain criteria in order to be eligible for federal and state subsidized child development services, including that a family must be either a current aid recipient, income eligible, homeless, or one whose children are recipients of protective services or have been identified as being, or at risk of being, abused, or neglected, as specified. (WIC 10271)
- Requires CDSS, in consultation with CDE, to establish a fee schedule for families using preschool and child care and development services, and, further states Legislative intent that the new fee schedule be simple and easy to implement. (Education Code Section [EDC] 10290(a))
- Requires the Superintendent of Public Instruction to use the fee schedule developed in conjunction with CDSS, as specified, for families using full-day preschool (EDC 8252(a))
- Prohibits family fees from being collected for the 2021-22 and 2022-23 fiscal years, and, further, requires, during the 2022-23 fiscal year, contractors to reimburse subsidized childcare providers for the full amount of the certificate or voucher without deducting family fees. (EDC 10290(h)(i)(j))
- Requires CDSS, in consultation with CDE, to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of program year and the hours of services. (WIC 10280(a))
- Establishes, beginning July 1, 2021, the Standard Reimbursement Rate (SRR) to be $12,888 and, further, requires, beginning with the 2022-23 fiscal year, that the SRR be increased by the cost-of-living adjustment granted by the Legislature as enumerated in EDC 42238.15. (WIC 10280(b))
- Requires the cost of child care services for recipients of the California Work Opportunity and Responsibility to Kids Program (CalWORKs) be governed by regional market rates, and, further, defines “regional market rate” as care costing no more than 1.5 market standard deviations above the mean cost of care for that region. (WIC 10374.5(a))
- Establishes, beginning January 1, 2022, the Regional Market Rate (RMR) ceilings at the greater of: the 75th percentile of the 2018 RMR survey for that region; or, the RMR ceiling that existed in that region on December 31, 2021. (WIC 10374.5(b)(2))
- States Legislative intent to reimburse childcare providers at the 85th percentile of the most recent RMR survey. (WIC 10374.5(a))
- Requires, beginning January 1, 2022, contractors who, as of December 31, 2021, received the SRR to be reimbursed at the greater of the following: the 75th percentile of the 2018 RMR survey; or, the contract per-child reimbursement amount as of December 31, 2021. (WIC 10280(c)(1))
- Requires the Governor and the Child Care Providers Union (CCPU), consistent with the agreement dated June 25, 2021, to establish a JLMC to develop recommendations for a single reimbursement rate structure that addresses quality standards for equity and accessibility while supporting positive learning and developmental outcomes for children. Further, requires the JLMC to develop recommendations and present the recommendations to the Department of Finance (DOF) no later than November 15, 2022, in order to inform the Governor’s proposed budget for the 2023-24 fiscal year. (WIC 10280.2(a))
- Requires CDSS, in consultation with CDE, to convene a working group separate from the JLMC, to assess the methodology for establishing reimbursement rates and the existing quality standards for childcare and development and preschool programs, as specified. Further, requires the workgroup to, no later than August 15, 2022, provide recommendations, including, but not limited to, recommendations on how CDSS should define childcare workforce competencies and how these competencies would align with rate reform, to the JLMC, DOF, and the Joint Legislative Budget Committee. (WIC 10280.2(b)
FISCAL EFFECT: According to the Senate Appropriations Committee on April 18, 2023:
- CDE estimates unknown costs for rate increases from transitioning to the alternative rate methodology. CDE estimates that waiving family fees would cost approximately $30.8 million annually ($16.3 million in Proposition 98 and $14.5 million of non-Proposition 98 funding), and that funding would be necessary to cover the cost of waived family fees. CDE estimates costs of $1,821,000 in 2024-25, $1,816,000 in 2025-26, and $316,000 in 2026-27 and ongoing thereafter for state administration (General Fund).
- Unknown, potentially significant costs for CDSS-administered programs, related to rate increases, waiving family fees, and state administration.
COMMENTS:
Background: State-Subsidized Childcare. Subsidized childcare in California seeks to support healthy child development and support children of parents who may be: working; in training; seeking employment; incapacitated; or, in need of respite. Subsidized childcare is available to families through a number of programs, including, among others:
- CalWORKs, which provides childcare in three “stages” to families receiving CalWORKs benefits, but also to families who are transitioning from or are no longer receiving CalWORKs aid;
- Alternative Payment Programs (APPs), which provide vouchers to families who may then obtain childcare in a center, family childcare home, or from a license-exempt provider;
- CSPP, which provides culturally, developmentally, and linguistically appropriate curriculum to eligible three- and four-year olds; and,
- General Child Care (CCTR), which includes contracted centers and family childcare homes.
A February 2023 report from the Legislative Analyst’s Office (LAO) states that, in Budget Year 2022-23, California is providing funding to serve approximately 713,000 children through the following childcare slot allocations: 127,800 slots for all three stages of CalWORKs; 161,300 slots allocated for APPs; 211,000 total slots for full- and part-time CSPP; and, 78,500 slots for CCTR.
Childcare Users and Providers. While eligibility criteria varies based on program type, subsidized childcare in California serves primarily low-income families. To qualify for CalWORKs and therefore subsidized childcare, families must meet certain income criteria, and grant amounts are adjusted based on family size, income level, and region. Families are also eligible for subsidized care if the family has an income that is less than 85% of the state median income. For a family of three, this equates to $82,102, and for a family of four, this equates to $95,289, according to the February 2023 LAO report. In October 2022, CDSS released its Child Care Transition Quarterly Report, which found that, in fiscal year 2021-22, 315,566 children were served in a subsidized childcare program. Excluding children served through CalWORKs Stage 1 and the Emergency Bridge Program for Foster Children, the following were the demographics of families receiving subsidized childcare: 54.1% Hispanic, 20.6% White, 19.9% Black, and 3.5% Asian. 16% of children served were Dual Language Learners, and of those, 71.6% spoke Spanish, 6.2% spoke Armenian, 5.4% spoke Cantonese, and 12.5% spoke another language.
As it relates to providers, a February 2022 research brief entitled “‘The Forgotten Ones’ – The Economic Well-Being of Early Educators during COVID-19” found that: “Virtually all early educators are women, the vast majority are women of color, and a substantial number were born outside the United States. Compared to working adults in California, members of the [Early Care and Education] workforce tend to earn lower wages, and their economic well-being suffers as a result.” The brief also found that, while the majority of family childcare providers own their home, only 39.9% of center-based teachers are homeowners, compared to 54.7% of working California adults statewide. Around one-third of family childcare providers and center-based teachers require at least one form of public assistance, such as Medi-Cal, and approximately 17.5% of family childcare providers under age 40 rely on food assistance. One-third of family childcare providers and center-based teachers reported that they lack the quality or kinds of food they need; this number increases to 39% for center-based teachers who are women of color, and 42% for educators who are immigrants. Data from the UC Berkeley Center for the Study of Child Care Employment also found that the income of childcare workers range from $16,200 to $30,000, only about one-fifth of providers have retirement savings, and at least 16% have no health insurance.
Research demonstrates that California’s subsidized childcare system consists primarily of low-income women of color providing care to children and families who are predominately low-income individuals of color.
Paying for Subsidized Childcare. Childcare providers in California are paid through either vouchers or direct care contracts with the state. Providers that care for children in a voucher-based program (described in the table below) are reimbursed using the RMR, which is based on a survey of licensed childcare providers, as well as the prices charged by providers that are paid by parents within a given market region. The RMR survey is administered every two to three years and reflects the prices that providers charge families for care, though it is worth noting that oftentimes providers base tuition on what families in their communities can afford, rather than on the actual cost of care. AB 131 (Committee on Budget), Chapter 116, Statutes of 2021, increased the RMR, beginning January 1, 2022, to the 75th percentile of the 2018 RMR survey, or the new SRR as of December 31, 2021, whichever is higher.
For providers that contract directly with the state to serve a specified number of eligible children (described in the table below), rates are determined through the SRR, which is a flat rate set annually in the state budget. The SRR is adjusted by length of care and age of child, and providers receive a higher SRR for serving students with limited English proficiency and students with disabilities. It should be noted that, unlike the RMR, the SRR does not vary based on the geographic location in which the child is served and therefore does not account for geographic cost factors; however, the SRR receives a statutorily required annual cost-of-living adjustment. The February 2023 LAO report states that the SRR is currently $54.93 for childcare and $55.27 for state preschool.
The primary differences between RMR- and SRR-funded programs are, among others, as follows:
Regional Market Rate (RMR) | Standard Reimbursement Rate (SRR) |
|
|
|
|
|
|
Family Fees. The CCDF – a federal funding stream that helps states cover the cost of certain childcare programs – requires states to establish a sliding fee scale for families that receive childcare services supported by federal funds. As such, some parents pay a fee to help cover the costs of needed care. These family fees are assessed based on income and family size, but cannot be based on the cost of care or amount of subsidy payment that a family receives. Current law permits, at the state’s discretion, family fees to be waived for families who meet certain criteria, including families that have an income at or below the federal poverty level (FPL); currently the FPL for a family of three is $24,860, according to the United States Department of Health and Human Services. Beginning in April 2020, family fees have been waived in California for all families receiving subsidized childcare through the following actions:
- On April 4, 2020, Governor Newsom signed Executive Order N-45-20, which suspended family fees for a period of 60 days.
- SB 820 (Committee on Budget and Fiscal Review), Chapter 110, Statutes of 2020, later waived family fees for all subsidized children in July and August 2020, and included a waiver of family fees beginning September 1, 2020, through June 30, 2021.
- AB 131 (Committee on Budget), Chapter 116, Statutes of 2021, waived family fees for the 2021-22 Budget Year.
- AB 210 (Committee on Budget), Chapter 62, Statutes of 2022, extended the pause on collection of family fees for the 2022-23 fiscal year.
An October 2022 CalMatters article states, according to CDSS, approximately $88 million in family fees will be waived in the 2022-23 fiscal year. Currently, family fees are scheduled to resume on July 1, 2023; however, the provisions of this bill would prohibit the collection of family fees until the new, equitable sliding scale, as established by the provisions of this bill, is created and implemented.
Actual Costs of Care. A key component of the childcare reimbursement rate conversation is that oftentimes the reimbursement rates paid to providers does not cover the true cost of care. Recent increases in inflation have resulted in higher costs to providers when purchasing the supplies necessary to maintain quality care, such as milk, baby formula, and baby wipes. A March 2023 brief from the Child Care Resource Center demonstrates that the cost of providing care for a preschooler in a full-time childcare center exceeds the current reimbursement rate and the 2018 rate when adjusted for inflation. For example, in San Bernardino County, the 75th percentile of the 2018 RMR survey equates to a rate of $983.03; when adjusted for inflation in 2023, this reimbursement rate should be $1,092. The brief notes that the monthly cost of care in the region is approximately $1,908.17, which results in a funding gap of $925.14 for providers in San Bernardino County. In Los Angeles County, this gap is $987.33, in Alameda County this gap is $717.05, and in Butte County, this gap is $537.30.
Childcare reimbursement rates have also lagged when compared to increases in the minimum wage. A March 2023 report from the California Budget & Policy Center notes that, while minimum wage has increased 55% from 2016-17 to 2022-23,
“…The rate ceilings for childcare providers across all 58 counties generally have not kept pace with the rising minimum wage after the most recent increase to payment rates enacted in 2021-22. In the state’s most populous county – Los Angeles – payment rates for licensed centers care for preschool-age children increased by less than half as much as the statewide minimum wage. Providers in some counties, such as Riverside County, saw miniscule rate increases of less than 5%. And in 27 counties, due to weaknesses in the rate-setting methodology, licensed centers have not received a single rate increase for care for preschool-age children since 2016-17. Policymakers have not consistently updated the SRR each year so that contract providers can keep pace with rising staff costs and the increasing price of food and supplies. From 2016-17 to 2022-23, the SRR increased by 36.6%, falling short of the 55% increase in the state minimum wage.”
Recent Changes in Childcare. California’s childcare system has undergone a number of changes in recent years. In 2019, Governor Newsom signed AB 378 (Limon), Chapter 385, Statutes of 2019, which gave approximately 40,000 childcare providers the right to join a union and collectively bargain with the State of California. In 2021, AB 131 ratified the bargaining contract agreed to between CCPU and the State of California, and codified portions of the agreements related to rate increases, provider stipends, licensing initiatives, and mental health supports. AB 131 also required the State of California and CCPU to create a JLMC for purposes of providing recommendations on a single reimbursement rate system in coordination with a larger working group convened by CDSS (discussed below). The agreement was effective beginning July 26, 2021, and remains in effect until June 30, 2023. As such, CCPU is currently in bargaining negotiations with the state for a new contract that would take effect upon ratification in the state budget.
Additionally, AB 131 transferred administration of certain childcare programs from CDE to CDSS, including, among others: CCTR; Migrant Child Care and Development Program; APPs; CalWORKS stages 2 and 3; Resource and Referral agencies; Local Child Care and Development Planning Councils; and, Head Start and Early Head Start.
Rate and Quality Workgroup Final Report. In addition to the previously discussed changes, and in addition to the aforementioned JLMC, AB 131 established a RQWG to be convened by CDSS with diverse stakeholder representation to assess the methodology for establishing reimbursement rates and the existing quality standards for child care and development and preschool programs. AB 131 required the workgroup to submit recommendations to the Legislature no later than August 15, 2022. The workgroup met over a dozen times between January and August 2022 and included the perspectives of early learning and care providers, APPs, childcare experts, families, and representatives of CDSS and CDE.
In a summary of its findings, the report states:
“Despite the strengths and quality currently present in California’s early learning and care programs, and the critical and nurturing role that the predominately women of color workforce plays in educating and caring for California’s young ones, the current reimbursement rate-setting methodology establishes rates that are not sufficient to cover the true cost of providing early learning and care services in accordance with current state licensing and program quality requirements. The historic [SRR] approach failed to account for or differentiate for the cost of meeting the various program quality standards required of different early learning and care programs. The current approach of using a [RMR] survey of prices that programs are charging families institutionalizes race- and income-based inequities by establishing low rates in low-income areas where programs are offsetting their prices so that families can afford to pay. In addition, a history of opaque policy choices and changes have resulted in an exceptionally complex and unaligned set of base rates and adjustment factors that are virtually unnavigable by programs, educators, and families. The result is inequitable access to early learning and care opportunities that meet child and family needs, and exceptionally low compensation for program owners and educators.”
As a result of its work, the RQWG identified four core recommendations:
- Ensure equity is foundational to all change – work toward equity as an outcome and implement equity as a process.
- Replace the current methodology of using a market price survey to set rates with an alternative methodology, which uses cost estimates/models to set base rates to compensate early learning and care programs. The cost of care for meeting current state requirements will become the basis of the reimbursement rate, including wage scales that set a living wage floor.
- Create a single rate structure that specifies base rates and that is designed to address historical inequities. This structure should specify separate base rates for Family, Friend, and Neighbor care and Home-Based and Center-Cased early learning and care and should differentiate base rates for meeting different sets of state standards.
- Continuously evaluate the rate-setting methodology to address equity and adjust for changing conditions and rising costs.
The RQWG made rate reform recommendations similar to those made by previous reports, including:
- The Master Plan on Early Learning and Care, which was developed by the California Health and Human Services Agency, in consultation with stakeholders, and recommended in its December 2020 report that, among other things, California adopt a tiered reimbursement rate with appropriate adjustments in order to support equity, simplicity, and quality. The Master Plan also recommended designing a sliding scale for family contributions, which could increase equity in both access and outcomes for families.
- Assembly Blue Ribbon Commission on Early Childhood Education, which was initiated by California Assembly Speaker Anthony Rendon in consultation with stakeholders, and recommended in its April 2019 report that California implement comprehensive rate reform through a multi-step process, and, in the long-term, that reimbursement rates for Title 5 and Title 22 programs include competitive compensation that increases with quality improvement, among other recommendations.
- First 5 California Reimbursement Rate Workgroup, which released its report in November 2018 and recommended that California implement comprehensive rate reform by, among other things, incentivizing quality, using the RMR to reimburse all counties at a rate that considers regional economic costs, and conduct ongoing reviews of rate changes to understand their impacts on the childcare system and make adjustments as needed.
In its conclusion, the RQWG writes, “A funding structure that supports programs and educators’ abilities to provide the quality early learning and care they are working to provide now (without adequate resources) is integral to realizing the positive impacts of early learning and care for children, families, and the broader California economy and society. The time has come for California to create the systems and policies that allow these positive impacts to finally be realized in more equitable ways.”
Author’s Statement: According to the Author, “[This bill] will help childcare providers and families by transitioning providers to a single cost-based reimbursement rate, suspending family fees until an equitable sliding scale for family fees is established, and funding providers using an enrollment-based contract earning mechanism. This bill is a key opportunity to prioritize and support California’s youngest children and their families.
“California must make a multi-year commitment to adopting rate reform and provide an immediate down payment to address California’s childcare crisis. Suspending family fees is an efficient anti-poverty solution that has already proven successful during the pandemic. It is time for the legislature and this administration to fix the childcare crisis and transform childcare and early learning in California to ensure young children and families can thrive.
“This bill will require the California Department of Social Services (CDSS) to apply to the federal Health and Human Services agency to amend the State’s current Child Care Development Fund state plan to change reimbursement rates to an alternative methodology, including a cost-based model that is consistent with the recommendations of the CDSS led Rate and Quality Workgroup report and the Joint Labor Management Committee (JLMC). This bill also evaluates the cost of providing care by considering current statutory and regulatory requirements, staff salaries, training, supplies, ratios, enrollment levels, facilities, and family engagement. The bill will require that this methodology be updated regularly to account for rising costs in care.”
Need for this bill: The provisions of this bill would build upon the recommendations made by the RQWG and would implement an alternative methodology for reimbursing childcare providers. In adopting an alternative methodology, this bill seeks to reimburse childcare providers for the true cost of care while also ensuring families in California have access to quality childcare. Specifically, this bill requires CDSS, in consultation with CDE, to develop an alternative methodology for calculating subsidy payment rates for childcare and CSPP services. This bill would also require a new, equitable sliding scale for collecting family fees be developed, and would prohibit family fees from being collected until the sliding scale is implemented in order to prevent families who rely on subsidized childcare from shouldering the costs of care. In combining the creation and implementation of an alternative rate-setting methodology and the prohibition on collecting family fees, this bill seeks to ensure that childcare providers and low-income families are not responsible for absorbing the difference in rates paid to childcare providers and the true costs of care.
Equity Implications: The provisions of this bill seek to address a number of equity issues within the childcare space:
- Equity for women, such as the women who comprise a large portion of the childcare workforce, as well as the women who rely on childcare as a key support that enables them to enter the workforce;
- Equity for individuals of color, such as the Black, Indigenous, and Latina women of color who comprise a large portion of the childcare workforce, as well as the users of subsidized childcare, many of whom are families of color;
- Equity for individuals who are low-income, such as the providers who rely on social safety net services and for whom retirement and health care benefits are costly to obtain, but also the parents who meet income eligibility requirements to qualify for subsidized childcare programs, such as CalWORKs; and,
- Equity based on geography by eliminating the bifurcated reimbursement system that takes regional costs into account for some providers, but not others.
In its conclusion, the RQWG report states, “Through its recommendations and assessments, the [workgroup] seeks to dismantle a racist, sexist, and classist methodology for setting reimbursement rates for early learning and care programs…By incorporating and implementing the recommendations of this report, California will be well positioned to lead the nation in providing quality, easily accessible early learning and care opportunities for the diverse range of children and families who call California home and for compensating and valuing the educators who serve them.”
Policy Considerations: AB 596 (Reyes) is this bill’s companion and is currently being considered in Senate Human Services Committee. AB 596 passed out of Assembly Education Committee with amendments. According to the Assembly Education Committee analysis, amendments were recommended to:
- Require that the DSS collaborate with the CDE in all aspects of developing, reviewing, and updating the alternative methodology and interim plan for childcare reimbursement rates.
- Require the DSS, in collaboration with the CDE, to submit recommendations on the alternative methodology, for approval by the Joint Legislative Budget Committee, prior to seeking federal approval, and prior to implementing the alternative methodology.
- Clarify that General Child Care Program providers are included in the requirement to be reimbursed at 100% of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less.
The author may wish to take the same amendments in order to create parity with their companion bill, AB 596.
Double referral: This bill will be referred to the Assembly Education Committee should it pass out of this committee.
RELATED AND PRIOR LEGISLATION:
AB 596 (Reyes) of 2023, is nearly identical to this bill. AB 596 is set to be heard by the Senate Human Services Committee on June 19, 2023.
SB 976 (Leyva) of 2022, would have established the “Universal Preschool Act” to expand access to and operation hours of CSPP to all three- and four-year-old children regardless of family income; would have expanded the types of child care providers who may be eligible to offer a universal preschool program to Head Start centers and licensed family daycare facilities; would have waived family preschool fees; and, would have required the Superintendent of Public Instruction in consultation with the Director of CDSS to convene a statewide coordination council, and adopt rules and regulations for the administration of all universal preschool programs. SB 976 passed out of this committee and was referred to the Assembly Education Committee but was not set for a hearing.
AB 210 (Committee on Budget), Chapter 62, Statutes of 2022, among other things, allowed for family fees to be waived between July 1, 2022, and June 30, 2023, for all families receiving child care subsidies.
AB 92 (Reyes) of 2022, would have made changes to the amount of family fees collected for preschool and child care and development services and would have prohibited providers from absorbing any reduction in pay due to waivers in family fees. AB 92 was vetoed by Governor Newsom.
SB 246 (Leyva) of 2021, would have required CDSS to establish a single reimbursement rate for early learning and care programs, including variation for regional costs and quality adjustment factors. SB 246 was referred to the Assembly Appropriations Committee but was not set for a hearing.
SB 174 (Leyva) of 2019, would have required that specified providers of subsidized child care be reimbursed based upon an updated RMR as of January 1, 2021; would have established the “Quality Counts California Pilot Reimbursement Program,” to provide higher reimbursement rates to APP providers for meeting certain quality standards; and, would have made the enactment of the bill contingent upon the enactment of related legislation, as specified. SB 174 was referred to the Assembly Appropriations Committee but was not set for a hearing.
SB 820 (Committee on Budget and Fiscal Review), Chapter 110, Statutes of 2020, amongst other things, waived, from September 1, 2020, to June 30, 2021, family fees for specified subsidized early learning and care programs for families who are not receiving in-person services or who are sheltering-in-place due to the COVID-19 pandemic.
AB 86 (Committee on Budget and Fiscal Review), Chapter 48, Statutes of 2019, amongst other things, simplified family fees for families receiving state-subsidized child care by creating a process for the CDE to adopt a new fee schedule that will provide more predictable fees through a cost-neutral change to the current fee structure and required CDE to report family fees collects for preschool programs to the DOF.
REGISTERED SUPPORT / OPPOSITION:
Support
Child Care Resource Center (Co-Sponsor)
Children Now (Co-Sponsor)
EveryChild California (Co-Sponsor)
Parent Voices California (Co-Sponsor)
Alameda County Office of Education
Allies for Every Child
California Alliance of Child and Family Services
California Alternative Payment Program Association
California Association for The Education of Young Children (CAAEYC)
California Catholic Conference
California Family Child Care Network
California Legislative Women's Caucus
California Strategies & Advocacy, LLC
California Work & Family Coalition
Caring Across Generations
Catalyst California
Child Care Alliance of Los Angeles
Child Care Law Center
Child Care Providers United
Children's Bureau of Southern California
City and County of San Francisco
City of Goleta
Coalition of California Welfare Rights Organizations
County of San Diego
County of Santa Clara
Crystal Stairs, INC.
Early Care and Education Consortium
Early Edge California
Edvoice
Equal Rights Advocates
Everychild Foundation
Family Violence Appellate Project
First 5 Orange County
First 5 Riverside County
Friends Committee on Legislation of California
GRACE Institute - End Child Poverty in CA
Head Start California
John Burton Advocates for Youth
Kern County Superintendent of Schools Office
Kidango
KinderCare Learning Companies
LA Best Babies Network
Los Angeles County Office of Education
Low Income Investment Fund
National Women's Political Caucus of California
National Women’s Political Caucus - Pomona/Inland Empire
Oakland Starting Smart and Strong
Office of The Riverside County Superintendent of Schools
Options for Learning
Our Family Coalition
Public Counsel
Regional Economic Association Leaders (R.E.A.L.) Coalition
Riverside County Public K-12 School District Superintendents
San Francisco Women's Political Committee
Santa Clara County Office of Education
Santa Clara County School Boards Association
Silicon Valley Community Foundation
The Education Trust - West
UNITE-LA, INC.
United Ways of California (UWCA)
Untitled No. 1 School
YMCA of San Diego County
Opposition
None on file
Analysis Prepared by: Alexandria Smith / HUM. S. / (916) 319-2089
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | SB 380 |
THIRD READING
Bill No: SB 380
Author: Limón (D), et al.
Amended: 4/18/23
Vote: 21
SENATE HUMAN SERVICES COMMITTEE: 4-0, 4/17/23
AYES: Alvarado-Gil, Ochoa Bogh, Menjivar, Wahab
NO VOTE RECORDED: Hurtado
SENATE EDUCATION COMMITTEE: 7-0, 4/26/23
AYES: Newman, Ochoa Bogh, Cortese, Glazer, McGuire, Smallwood-Cuevas, Wilk
SENATE APPROPRIATIONS COMMITTEE: 6-1, 5/18/23
AYES: Portantino, Ashby, Bradford, Seyarto, Wahab, Wiener
NOES: Jones
SUBJECT: Early learning and care: rate reform
SOURCE: California Child Care Resource and Referral Network
Child Care Resource Center
Children Now
EveryChild California
Parent Voices
DIGEST:
This bill requires the California Department of Social Services (CDSS), in collaboration with the California Department of Education (CDE), to develop and implement an alternative methodology for calculating subsidy payment rates for child care services and state preschool program (CSPP) services; require CDSS, in consultation with CDE, to develop an equitable sliding scale for the payment of family fees and prohibit family fees from being collected until the new equitable sliding scale is implemented; and increase reimbursements to state preschool and alternative payment providers, as specified.
ANALYSIS:
Existing law:
- Establishes the Early Education Act, and requires that CSPP provides an inclusive and cost-effective program that provide high-quality learning experiences, coordinated services, and referrals for families to access health, and social-emotional support services through full- and part-day programs. (EDC 8200 et seq.; 8201 et seq.; 8201(e))
- Finds that all families should have equitable access to a high-quality preschool program, regardless of race or ethnic status, cultural, religious, or linguistic background, family composition, or children with exceptional needs. Also finds that subsidized preschool services should be provided to all persons meeting the eligibility criteria, to the extent funding is made available, as specified. (EDC 8202 (a))
- Requires parent paid fees for the CSPP be used to pay reasonable and necessary costs for providing additional services and further specifies how parent fees for all state subsidized early childhood services and CSPP can be used and assessed by the state Superintendent of Public Instruction (SPI) in conjunction with CDSS, as specified. (EDC 8242 (1), 8252 et seq.)
- Provides that it is the intent of the Legislature that a new fee schedule be simple and easy to implement, and requires CDSS, in consultation with the CDE, to establish a fee schedule for families using preschool and child care services, as specified. (WIC 10290(a-b))
- Requires that the new family fee schedule retains a single flat monthly fee per family that differentiate between fees for full- or part-time care, and that families be assessed a single fee for all state subsidized care services, including CSPP, that is based on income, a certified family need for care services, and enrollment, and not on actual attendance. Further provides that no recalculation of a family fee occur if attendance varies from enrollment unless a change in need for care is assessed. (WIC 10290(c))
- Establishes eligibility criteria for state subsidized child care and development services (child care) based on family and child circumstance, including, but not limited to, income, homelessness, or if a child is or has been abused, neglected or exploited, as specified. (WIC 10271 et seq.)
- Requires that a family, for establishing the initial or ongoing eligibility for subsidized child care and development services programs, be considered to have met all eligibility requirements to receive those services for not less than 24 months without being required to report changes, or having their eligibility or need recertified, except in certain instances such as for the California Work Opportunity and Responsibility to Kids (CalWORKs) Stage 1, Stage 2, or Stage 3 programs for which the certification period is 12 months, as provided. (WIC 10271(h))
- Requires CDSS, in collaboration with CDE to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service. (WIC 10280)
This bill:
- Requires CDSS, in collaboration with CDE, to develop and implement an alternative methodology for calculating subsidy payment rates for child care services and CSPP services, as specified.
- Requires CDSS to develop an interim transition plan, if necessary, to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Further, requires CDSS to fully implement the alternative methodology commencing in fiscal year 2027-28.
- Requires any funding provided in the Budget Act of 2023 to increase reimbursement rates to be distributed using the interim transition plan, if it has been developed, until the alternative methodology is adopted.
- Requires funding and subsidy payments for child care providers to be based on enrollment of certified children with the contract rates set using the alternative methodology.
- Requires CDSS to review and update this new alternative methodology every three years and to seek preapproval from the U.S. Department of Health and Human Services (HHS) to amend the state’s current Child Care and Development Fund State Plan (State Plan) to change its current methodology for determining child care and CSPP payment rates to an alternative methodology, as provided.
- Requires CDSS, in consultation with CDE, to develop an equitable sliding scale for the payment of family fees and prohibit family fees from being collected until the new equitable sliding scale is established and implemented.
- Increases reimbursement rates by requiring that:
- CSPP contracting agencies be reimbursed 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less;
- CSPP family child care home education network (FCCHEN) providers be reimbursed based on the maximum certified hours of care for all families, regardless of attendance; and,
- Requires alternative payment program providers, including license-exempt providers, to be reimbursed based on the maximum certified hours of care, regardless of attendance, as specified.
Background
Child Care Provider Rates. In California, subsidized child care providers are paid in one of two ways: by accepting vouchers from families or by contracting directly with the state. Reimbursement rates for providers who accept vouchers vary based on the county in which the child is served. They are reimbursed by the state based on the Regional Market Rate (RMR) Survey. The RMR Survey measures a sample of prices charged by licensed child care providers and paid by parents within a given child care market region. The RMR survey is administered every two to three years, and provides “rate ceilings” based on provider setting and the age of the child for all 58 California counties. The rate ceiling is the highest payment a provider can receive from the state for the care of a child. Beginning in 2022, the RMR was set to the 75th percentile of the 2018 RMR survey. Alternative Payment agencies (APs), which issue vouchers to eligible families, are paid through the “administrative rate,” which provides them with 17.5 percent of total contract amounts.
Providers that contract directly with the state are paid with a statewide rate called the Standard Reimbursement Rate, which has typically been adjusted for factors such as the age of the child or disability status, but not on geographic cost factors and neither rate structure fully accounts for the actual cost of providing care to children. The bill would require CDSS, in collaboration with CDE, to develop an alternative methodology for calculating reimbursement rates for subsidized child care services and CSPP. The bill would also require the two department work together to develop an alternative methodology for calculating reimbursement rates for child care services provided under reimbursement system plan and CSPP.
In order to have one reimbursement rate structure for child care payments in California, the state and Child Care Providers United (CCPU), which is a union comprised of family child care providers within California, established a JLMC. The purpose of this JLMC was to develop recommendations for a single reimbursement rate structure to provide the Department of Finance (DOF) by no later than November 15, 2022. In 2022, CDSS, in consultation with CDE convened a working group to assess the methodology for establishing reimbursement rates and existing quality standards for subsidized child care and preschool programs. The Rate and Quality Workgroup recommendations relating to specified topics were provided to the JLMC, the Department of Finance (DOF), and the Joint Legislative Budget Committee by August 15, 2022. The Rate and Quality Workgroup included representatives from CCPU, teacher and administrator representatives of state-funded center based contractors, child care and development experts, parent representatives, a head start representative, an alternative payment program agency representative, and representatives from the administration, among others.
The Rate and Quality JLMC Joint Presentation for a Single Rate Structure Alternative Methodology proposal summary dated November 14, 2022, in part, states “This document summarizes the parties’ agreed upon approach to a single rate structure (inclusive of the agreed upon alternative methodology) and offers metrics for assisting with determining base rate setting. The single rate structure includes: 1. an alternative methodology that considers a cost estimation model; 2. base rates; 3. incentives/enhancement rate setting metrics; and, 4. evaluation of the rate structure….The alternative methodology will include a cost model. The single rate structure will be used to establish a base rate for different program settings.” Additionally, the proposal base rate metrics will include current state and federal requirements, equity, cost estimation and process metrics.
The Governor’s January 10th Budget proposal acknowledged the above workgroup activities and noted “the state will rely on the presented approach as it continues to develop a single rate structure… [and] will continue to work with CCPU to negotiate a successor agreement to the current agreement expiring June 30, 2023.” Rates are an issue currently subject to CCPU collective bargaining; however, for the stability of the system, rates need to also support non-CCPU providers as well. This bill would require CDSS to develop an interim transition plan, as needed, to implement the alternative methodology fully in 2027-28.
Family Fees. Prior to 2021, families enrolled subsidized child care and CSPP were required to pay a fee to the providers. Under state law and federal mandates, CDSS must establish a family fee schedule for families receiving child care services based on the most recent census data available on state median family income in the past 12 months, adjusted for family size, subject to the approval of the Department of Finance. The family fee schedule is differentiate between full-time fees and part-time fees and families are assessed a flat monthly fee. Assessment of the monthly fee is based on the following factors: hours of certified need as documented on the application for services; a family’s adjusted monthly income; and family size. Family fees cannot exceed the full-time monthly fee on the family fee schedule for the family size and income provided, however under the 2023 schedule these fees can range from $0-$700 per month depending on the above criteria.
AB 210 (Committee on Budget, Chapter 62, Statutes of 2022) allowed for family fees to be waived between July 1, 2022, and June 30, 2023, for all families receiving child care subsidies through the following programs: Alternative Payment Programs, including Migrant Alternative Payment Programs; Migrant Child Care and Development Programs; General Child Care and Development Programs; Family Child Care Home Education Networks; Child Care and Development Services for Children with Special Needs; and CalWORKs Stages One, Two, and Three. Although family fees are being waived for FY 2022–23, CSPP contractors are still required to calculate and assess the applicable family fee at initial certification and recertification as usual. According to CDE, this requirement is to ensure that contractors report the correct family fee amount(s) that are being waived and that families are aware of the updated fee that will be applicable July 1, 2023. The May revision proposes to continue the family fee waiver until September 30, 2023. This bill would instead prohibit the collection of family fees until a new sliding scale is implemented.
Related/Prior Legislation
AB 596 (Reyes, 2023) is identical to this bill. AB 596 will be heard by the Assembly Education Committee on April 26, 2023.
SB 976 (Leyva, 2022) would have established the Universal Preschool Act to expand access to and operation hours of CSPP to all three- and four-year-old children regardless of family income; would have expanded the types of child care providers who may be eligible to offer a universal preschool program to Head Start centers and licensed family daycare facilities; would have waived family preschool fees; and, would have required the Superintendent of Public Instruction in consultation with the Director of CDSS to convene a statewide coordination council, and adopt rules and regulations for the administration of all universal preschool programs.
AB 210 (Committee on Budget, Chapter 62, Statutes of 2022) among other things, allowed for family fees to be waived between July 1, 2022, and June 30, 2023, for all families receiving child care subsidies.
SB 820 (Committee on Budget and Fiscal Review, Chapter 110, Statutes of 2020) amongst other things, waived, from September 1, 2020, to June 30, 2021, family fees for specified subsidized early learning and care programs for families who are not receiving in-person services or who are sheltering-in-place due to COVID-19.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
According to the Senate Appropriations Committee:
- CDE estimates unknown costs for rate increases from transitioning to the alternative rate methodology. CDE estimates that waiving family fees would cost approximately $30.8 million annually ($16.3 million in Proposition 98 and $14.5 million of non-Proposition 98 funding), and that funding would be necessary to cover the cost of waived family fees. CDE estimates costs of $1,821,000 in 2024-25, $1,816,000 in 2025-26, and $316,000 in 2026-27 and ongoing thereafter for state administration (General Fund).
- Unknown, potentially significant costs for CDSS-administered programs, related to rate increases, waiving family fees, and state administration.
SUPPORT: (Verified 5/19/23)
California Child Care Resource and Referral Network (co-source)
Child Care Resource Center (co-source)
Children Now (co-source)
EveryChild California (co-source)
Parent Voices(co-source)
California Association for the Education of Young Children
California Family Child Care Network
California Legislative Women's Caucus
Child Action, Inc.
Child Care Alliance of Los Angeles
Child Care Law Center
Circle of Friends Child Care Center
City of Goleta
Coalition of California Welfare Rights Organizations
County of Santa Clara
Crystal Stairs, Inc.
Early Care and Education Consortium
Early Edge California
Edvoice
Family Violence Appellate Project
First 5 LA
First 5 Riverside County
Friends Committee on Legislation of California
Grace Institute - End Child Poverty in California
John Burton Advocates for Youth
Kern County Superintendent of Schools Office
Kidango
Kindercare Learning Companies
LA Best Babies Network
Los Angeles County Office of Education
Low Income Investment Fund
Marin Family Child Care Association
National Council of Jewish Women-California
National Women’s Political Caucus - Pomona/Inland Empire
National Women's Political Caucus of California
Oakland Starting Smart and Strong
The Education Trust - West
Untitled No. 1 School
YMCA of San Diego County
OPPOSITION: (Verified 5/19/23)
None received
Prepared by: Bridgett Hankerson / HUMAN S. / (916) 651-1524
5/20/23 12:44:43
**** END ****
SENATE COMMITTEE ON
Senator Anthony Portantino, Chair
2023 - 2024 Regular Session
SB 380 (Limón) - Early learning and care: rate reform
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
Bill Summary:
SB 380 would require the California Department of Social Services (CDSS), in collaboration with the California Department of Education (CDE), to develop and implement an alternative methodology for calculating subsidy payment rates for child care services and state preschool program services; require CDSS, in consultation with CDE, to develop an equitable sliding scale for the payment of family fees and prohibit family fees from being collected until the new equitable sliding scale is implemented; and increase reimbursements to state preschool and alternative payment providers, as specified.
Fiscal Impact:
- CDE estimates unknown costs for rate increases from transitioning to the alternative rate methodology. CDE estimates that waiving family fees would cost approximately $30.8 million annually ($16.3 million in Proposition 98 and $14.5 million of non-Proposition 98 funding), and that funding would be necessary to cover the cost of waived family fees. CDE estimates costs of $1,821,000 in 2024-25, $1,816,000 in 2025-26, and $316,000 in 2026-27 and ongoing thereafter for state administration (General Fund).
- Unknown, potentially significant costs for CDSS-administered programs, related to rate increases, waiving family fees, and state administration.
Background:
The CDE administers state preschool programs which provide age and developmentally appropriate programs designed to facilitate the transition to kindergarten for three- and four-year-old children in educational development, health services, social services, nutritional services, parent education and parent participation, evaluation, and staff development. The CDSS administers numerous child care and development programs, including, but not limited to, CalWORKs child care, alternative payment programs that provide vouchers for eligible families, and center-based direct-contract child care programs.
Current law requires the CDSS, in consultation with the CDE, to convene a working group to assess the methodology for establishing reimbursement rates and the existing quality standards for child care and development and preschool programs, including, but not limited to, licensing standards and the requirements for equity and accessibility to all provider types and settings. The workgroup must include, but not be limited to, Child Care Providers United - California to represent family child care providers, as defined, teacher and administrator representatives of state-funded center-based contractors for both preschool and infant-toddler settings, child development experts, parent representatives, a Head Start representative, an alternative payment program agency representative, and representatives from the administration, as determined necessary by CDSS. The workgroup released its recommendations in August 2022.
Existing law requires the CDSS, in consultation with the CDE, to establish a fee schedule for families using preschool and child care and development services and requires families who utilize those services to be assessed a family fee that is based on income, certified family need for full-time or part-time care services, and enrollment. Current law prohibits family fees from being collected for the 2022–23 fiscal year.
Proposed Law:
Specific provisions of the bill would:
- Require CDSS, in collaboration with CDE, to develop and implement an alternative methodology for calculating subsidy payment rates for child care services and state preschool program services, as specified.
- Require CDSS to develop an interim transition plan, if necessary, to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act. Require CDSS to fully implement the alternative methodology commencing in 2027-28.
- Require any funding provided in the Budget Act of 2023 to increase reimbursement rates to be distributed using the interim transition plan, if it has been developed, until the alternative methodology is adopted.
- Require funding and subsidy payments for child care providers to be based on enrollment of certified children with the contract rates set using the alternative methodology.
- Require CDSS to review and update this new alternative methodology every three years and to seek preapproval from the U.S. Department of Health and Human Services to amend the state’s current Child Care and Development Fund State Plan to change its current methodology for determining child care and preschool payment rates to an alternative methodology, as provided.
- Require CDSS, in consultation with CDE, to develop an equitable sliding scale for the payment of family fees and prohibit family fees from being collected until the new equitable sliding scale is established and implemented.
- Increase reimbursement rates by requiring that:
- State preschool program contracting agencies be reimbursed 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less;
- State preschool family child care home education network providers be reimbursed based on the maximum certified hours of care for all families, regardless of attendance; and,
- Alternative payment program providers, including license-exempt providers, to be reimbursed based on the maximum certified hours of care, regardless of attendance, as specified.
Related Legislation:
AB 596 (Reyes) is substantially similar to this bill. The bill is currently in the Assembly Appropriations Committee.
-- END --
SENATE COMMITTEE ON EDUCATION
Senator Josh Newman, Chair
2023 - 2024 Regular
Bill No: SB 380 Hearing Date: April 26, 2023
Author: | |||
Version: | April 18, 2023 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Lynn Lorber | ||
Subject: Early learning and care: rate reform
SUMMARY
This bill 1) increases reimbursements to state preschools and alternative payment providers; 2) requires the California Department of Social Services (DSS), in collaboration with the California Department of Education (CDE), to develop and implement an alternative methodology for calculating subsidy payment rates for child care services and state preschool program services; 3) requires DSS, in consultation with CDE, to develop an equitable sliding scale for the payment of family fees; and, 4) prohibits family fees from being collected until the new equitable sliding scale is established and implemented.
BACKGROUND
Existing law:
Reimbursement rates
- Requires DSS and CDE to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service. (Education Code (EC) § 8242 and Welfare and Institutions Code (WIC) § 10280)
- Requires the reimbursement rates for full-day state preschool to be adjusted by the following reimbursement factors:
- Prior to January 1, 2022, providers serving children between 4 to 6.5 hours per day, the reimbursement factor is 75 percent of the Standard Reimbursement Rate (SRR; see # 4 below).
- Prior to January 1, 2022, providers serving children between 6.5 to 10.5 hours per day, the reimbursement factor is 100 percent of the SRR.
- For providers serving children for 10.5 hours or more per day, the reimbursement factor is 118 percent of the SRR. (EC § 8245)
- Prior to January 1, 2022, providers serving children between 4 to 6.5 hours per day, the reimbursement factor is 75 percent of the Standard Reimbursement Rate (SRR; see # 4 below).
- Requires the reimbursement rates for state preschool contracting agencies, for the 2022–23 fiscal year only, to be reimbursed 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less. (EC § 8245.5)
- Establishes, beginning July 1, 2021, the SRR to be $12,888 and requires, beginning with the 2022-23 fiscal year, that the SRR be increased by the cost-of-living adjustment granted by the Legislature. (WIC § 10280(b))
- Requires the cost of child care services for recipients of the California Work Opportunity and Responsibility to Kids Program (CalWORKs) be governed by regional market rates and defines “regional market rate” as care costing no more than 1.5 market standard deviations above the mean cost of care for that region. (WIC § 10374.5(a))
- Establishes, beginning January 1, 2022, the Regional Market Rate (RMR) ceilings at the greater of: the 75th percentile of the 2018 RMR survey for that region; or, the RMR ceiling that existed in that region on December 31, 2021. (WIC § 10374.5(b)(2))
- Requires, beginning January 1, 2022, contractors who, as of December 31, 2021, received the SRR to be reimbursed at the greater of the following: the 75th percentile of the 2018 RMR survey; or, the contract per-child reimbursement amount as of December 31, 2021. (WIC § 10280(c)(1))
- Requires the Governor and the Child Care Providers Union to establish a Joint Labor Management Committee (JLMC) to develop recommendations for a single reimbursement rate structure that addresses quality standards for equity and accessibility while supporting positive learning and developmental outcomes for children. (WIC § 10280.2(a))
- Requires DSS, in consultation with CDE, to convene a working group separate from the JLMC to assess the methodology for establishing reimbursement rates and the existing quality standards for child care and development and preschool programs, as specified. (WIC § 10280.2(b))
Family fees
- Requires parent fees paid for the state preschool program to be used to pay reasonable and necessary costs for providing additional services and further specifies how parent fees for all state subsidized early childhood services and state preschool can be used and assessed by the Superintendent of Public Instruction (SPI) in conjunction with DSS, as specified. (EC § 8242 and § 8252 et seq.)
- Requires DSS, in consultation with CDE, to establish a fee schedule for families using preschool and child care and development services, and requires families to be assessed a single flat monthly fee for all state-subsidized services based on income, certified family need for full-time or part-time care, and enrollment (families fees shall not be based on actual attendance). (WIC § 10290)
- Requires DSS to design the new family fee schedule based on the most recent census data available on state median family income in the past 12 months, adjusted for family size, and prohibits the revised fees from exceeding 10 percent of the family’s monthly income. (WIC § 10290)
- Prohibits family fees from being collected for the 2021-22 and 2022-23 fiscal years, and, further, requires, during the 2022-23 fiscal year, contractors to reimburse subsidized child care providers for the full amount of the certificate or voucher without deducting family fees. (WIC § 10290)
ANALYSIS
This bill:
Reimbursement rate
- Extends a portion of covid-era relief by requiring:
- State preschool program contracting agencies to be reimbursed 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less.
- State preschool family child care home education network providers to be reimbursed based on the maximum certified hours of care for all families, regardless of attendance.
- Alternative payment program providers, including license-exempt providers, to be reimbursed based on the maximum certified hours of care, regardless of attendance.
- State preschool program contracting agencies to be reimbursed 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less.
New alternative methodology
- Requires DSS, in collaboration with CDE, to develop and implement an alternative methodology for calculating subsidy payment rates for child care services and state preschool program services, in accordance with both of the following:
- Require the alternative methodology to build on the recommendations of the working group and be aligned with the recommendations of the Joint Labor Management Committee (see comment # 6).
- Require the alternative methodology to use a cost estimation model that includes all of the following:
- Program models will meet the current statutory and regulatory requirements for each program.
- Staff salaries and benefits.
- Training and professional development.
- Curricula and supplies.
- Group size and ratios.
- Enrollment levels.
- Facilities and other costs.
- Family engagement.
- Program models will meet the current statutory and regulatory requirements for each program.
- Require the alternative methodology to build on the recommendations of the working group and be aligned with the recommendations of the Joint Labor Management Committee (see comment # 6).
- Requires DSS to develop an interim transition plan, if necessary, to implement the alternative methodology by increasing the various rates from their current level to the alternative methodology level over time as funds are appropriated for these purposes in the annual Budget Act.
- Requires DSS to fully implement the alternative methodology beginning in the 2027–28 fiscal year, and requires CDE to implement the alternative methodology (for state preschool programs) once it has adopted the alternative methodology.
- Sunsets the current reimbursement system once the alternative methodology has been adopted by DSS and CDE.
- Requires any funding provided in the Budget Act of 2023 to increase reimbursement rates to be distributed using the interim transition plan, if it has been developed, until the alternative methodology is adopted.
- Requires funding and subsidy payments to be based on enrollment of certified children with the contract rates set using the alternative methodology.
- Requires DSS to review and update the alternative methodology every three years.
- Requires DSS to seek preapproval from the United States Department of Health and Human Services to amend the state’s current Child Care and Development Fund State Plan to change its current methodology for determining child care and development and preschool subsidy payment rates to an alternative methodology.
Family fees
- Requires DSS, in consultation with CDE, to develop an equitable sliding scale for the payment of family fees.
- Prohibits family fees from being collected until the new equitable sliding scale is established and implemented.
General
- States legislative intent that this bill implement the recommendations of the workgroup to create a new reimbursement rate structure for child care and development and preschool programs.
STAFF COMMENTS
- Need for the bill. According to the author, “SB 380 will help child care providers and families by transitioning providers to a single cost-based reimbursement rate, suspending family fees until an equitable sliding scale for family fees is established, and funding providers using an enrollment-based contract earning mechanism. This bill is a key opportunity to prioritize and support California’s youngest children and their families.
“California must make a multi-year commitment to adopting rate reform and provide an immediate down payment to address California’s child care crisis. Suspending family fees is an efficient anti-poverty solution that has already proven successful during the pandemic. It is time for the legislature and this administration to fix the child care crisis and transform child care and early learning in California to ensure young children and families can thrive.” - Increases rates now. This bill extends a portion of covid-era relief by requiring that a) state preschool program contracting agencies be reimbursed 100 percent of the contract maximum reimbursable amount or net reimbursable program costs, whichever is less; b) state preschool family child care home education network providers be reimbursed based on the maximum certified hours of care for all families, regardless of attendance; and, c) alternative payment program providers, including license-exempt providers, to be reimbursed based on the maximum certified hours of care, regardless of attendance.
Covid-era hold harmless policies and additional financial relief are set to expire June 30, 2023. Beginning July 1, 2023, rates will once again based on attendance rather than enrollment or contract maximums. - Establishes new way to calculate rates. Providers of early learning and care are reimbursed either based on the RMR or SRR: alternative payment programs are reimbursed using the RMR while child care programs and preschool programs that contract directly with DSS or CDE are reimbursed using the SRR.
The RMR varies based on the county in which the child is served. The RMR Survey measures a sample of prices charged by licensed child care providers and paid by parents within a given child care market region. The RMR survey is administered every two to three years, and provides “rate ceilings” based on provider setting and the age of the child for all 58 California counties. The rate ceiling is the highest payment a provider can receive from the state for the care of a child. Beginning in 2022, the RMR was set to the 75th percentile of the 2018 RMR survey for that region; or, the RMR ceiling that existed in that region on December 31, 2021.
The SRR is set in statute (currently $12,888 plus a cost-of-living adjustment) and has typically been adjusted for factors such as the age of the child or disability status, but not on geographic cost factors.
Neither the RMR nor the SRR fully account for the actual cost of providing care to children. This bill requires the development and implementation of an alternative methodology for calculating subsidy payment rates develop alternative method. This bill requires funding and reimbursements to be based on enrollment (not attendance) of certified children with the contract rates set using the alternative methodology. - Family Fees. The federal Child Care and Development Fund (CCDF) is an aggregate of several funding sources that is distributed in block grants by the federal government to the states. States receiving CCDF funds must prepare and submit to the federal government a plan detailing how these funds will be allocated and expended. States are also required to establish a sliding fee scale for families that receive child care services supported by federal funds. As such, some parents pay a fee to help cover the costs of needed care. These family fees are assessed based on income and family size, but cannot be based on the cost of care or amount of subsidy payment that a family receives. Current law permits, at the state’s discretion, family fees to be waived for families who meet certain criteria, including families that have an income at or below the federal poverty level (currently $24,860 for a family of three).
Prior to 2021, families with children enrolled in subsidized child care or state preschool were required to pay a fee to the providers. Existing law prohibits family fees from being collected for the 2021-22 and 2022-23 fiscal years, due to the pandemic.
Although family fees are being waived for 2022–23, state preschool contractors are still required to calculate and assess the applicable family fee at initial certification and recertification as usual. According to CDE, this requirement is to ensure that contractors report the correct family fee amount(s) that are being waived and that families are aware of the updated fee that will be applicable July 1, 2023. Under the 2023 schedule these fees can range from $0-$700 per month depending on the above criteria.
This bill requires the development of an equitable sliding scale for the payment of family fees and prohibits the collection of family fees until a new sliding scale is implemented. - Temporary relief in the Budget expiring. In response to the COVID-19 pandemic, the 2020-2021 and 2021-22 Budget Acts made numerous investments in child care and state preschool by utilizing state and federal funds to provide: temporary emergency vouchers; cleaning supplies and personal protective equipment; temporary supplemental rates to providers; one-time funding for infrastructure grants for the building of new facilities or renovation, repair, or expansion of existing facilities; a suspension of family fee contributions for subsidized child care; and increased reimbursement flexibility for providers accepting vouchers. The 2022-23 Budget Act through AB 210 (Committee on Budget), Chapter 62, Statutes of 2022 also continued some of the investments made during the height of the pandemic, including, but not limited to: providing child care providers with additional stipends; increasing subsidized child care program access to 145,000 slots; and continuing the hold harmless policies for both contract and voucher based care providers; and family fee waivers for state subsidized child care programs and state preschool programs through June 30, 2023. Beginning on July 1st, 2023 these provisions will cease and all providers will go back to pre-pandemic reimbursement policies.
- Rate and Quality Workgroup, and Joint Labor Management Committee. Existing law requires the Governor and the Child Care Providers Union to establish a JLMC to develop recommendations for a single reimbursement rate structure that addresses quality standards for equity and accessibility while supporting positive learning and developmental outcomes for children.
Existing law requires DSS, in consultation with CDE, to convene a working group separate from the JLMC, to assess the methodology for establishing reimbursement rates and the existing quality standards for child care and development and preschool programs, as specified.
In 2022, DSS, in consultation with CDE, convened a working group to assess the methodology for establishing reimbursement rates and existing quality standards for subsidized child care and preschool programs. The Rate and Quality Workgroup recommendations relating to specified topics were provided to the JLMC, the Department of Finance, and the Joint Legislative Budget Committee in August 2022. https://cdss.ca.gov/Portals/9/CalWORKs/CCT/CCDD/Rate%20and%20Quality%20Stakeholder%20Workgroup%20Report_August%202022_FINAL%20ADA%20(2).pdf?ver=2022-08-24-081240-333
The Rate and Quality JLMC Joint Presentation for a Single Rate Structure Alternative Methodology proposal summary dated November 14, 2022, in part, states “This document summarizes the parties’ agreed upon approach to a single rate structure (inclusive of the agreed upon alternative methodology) and offers metrics for assisting with determining base rate setting. The single rate structure includes: a) an alternative methodology that considers a cost estimation model; b) base rates; c) incentives/enhancement rate setting metrics; and, d) evaluation of the rate structure. … The alternative methodology will include a cost model. The single rate structure will be used to establish a base rate for different program settings.” Additionally, the proposal’s base rate metrics will include current state and federal requirements, equity, cost estimation and process metrics. https://cdss.ca.gov/Portals/9/CalWORKs/CCT/CCDD/2022.11.14%20Single%20Rate%20Proposal.pdf
The Governor’s 2023 Budget proposal acknowledged the above workgroup activities and noted “the state will rely on the presented approach as it continues to develop a single rate structure… [and] will continue to work with CCPU to negotiate a successor agreement to the current agreement expiring June 30, 2023.” - Related legislation.
AB 596 (Reyes, 2023) is nearly identical to this bill, and is scheduled to be heard by the Assembly Education Committee on April 26, 2023. - Prior legislation.
AB 92 (Reyes, 2022) would have made changes to the amount of family fees collected for preschool and child care and development services and would have prohibited providers from absorbing any reduction in pay due to waivers in family fees. AB 92 was vetoed by the Governor, whose veto message read:
The author's advocacy for California's working families is commendable. Like the author, expanding access to high quality early learning and care programs for babies and toddlers is a priority of my Administration. That's why the 2022 Budget Act included significant investments in preschool and child care including family fee waivers for the 2022-23 fiscal year, an income threshold increase for the State preschool program from 85 percent to 100 percent of state median income, and funding to allow providers to stay open even if enrollment is down due to COVID-19.
While the intent of this bill is consistent with our previous budget actions, it creates costs in the tens of millions of dollars not currently accounted for in the state's fiscal plan. With our state facing lower-than-expected revenues over the first few months of this fiscal year, it is important to remain disciplined when it comes to spending, particularly spending that is ongoing. We must prioritize existing obligations and priorities, including education, health care, public safety and safety-net programs.
The Legislature sent measures with potential costs of well over $20 billion in one-time spending commitments and more than $10 billion in ongoing commitments not accounted for in the state budget. Bills with significant fiscal impact, such as this measure, should be considered and accounted for as part of the annual budget process. For these reasons, I cannot sign this bill.
SB 246 (Leyva, 2021) would have required DSS to establish a single reimbursement rate for early learning and care programs, including variation for regional costs and quality adjustment factors. SB 246 was held in the Assembly Education Committee.
SB 174 (Leyva, 2019) would have required that specified providers of subsidized child care be reimbursed based upon an updated RMR as of January 1, 2021; would have established the “Quality Counts California Pilot Reimbursement Program,” to provide higher reimbursement rates to alternative payment program providers for meeting certain quality standards; and, would have made the enactment of the bill contingent upon the enactment of related legislation, as specified. SB 174 was held in the Assembly Appropriations Committee.
SUPPORT
Child Care Resource Center (Co-Sponsor)
Children Now (Co-Sponsor)
Everychild California (Co-Sponsor)
Parent Voices California (Co-Sponsor)
California Alternative Payment Program Association
California Catholic Conference
California Family Child Care Network
Catalyst California
Child Care Alliance of Los Angeles
City of Goleta
Coalition of California Welfare Rights Organizations
Crystal Stairs, INC.
Early Care and Education Consortium
Early Edge California
Edvoice
Everychild Foundation
Family Violence Appellate Project
First 5 Riverside County
Friends Committee on Legislation of California
Grace Institute - End Child Poverty in Ca
John Burton Advocates for Youth
Kern County Superintendent of Schools Office
Kidango
KinderCare Learning Companies
Los Angeles County Office of Education
Low Income Investment Fund
National Women's Political Caucus of California
National Women’s Political Caucus - Pomona/inland Empire
Oakland Starting Smart and Strong
Our Family Coalition
Silicon Valley Community Foundation
YMCA of San Diego County
OPPOSITION
None received
-- END --
SENATE COMMITTEE ON HUMAN SERVICES
Senator Alvarado-Gil, Chair
2023 - 2024 Regular
Bill No: | SB 380 | ||
Author: | Limón | ||
Version: | March 20, 2023 | Hearing Date: | April 17, 2023 |
Urgency: | No | Fiscal: | Yes |
Consultant: | Bridgett Hankerson | ||
Subject: Early learning and care: rate reform
SUMMARY
This bill prohibits the collection of family fees from child care and development services programs and California State Preschool Programs (CSPP) until a new equitable sliding scale is established and implemented. This bill requires the California Department of Social Services (CDSS) in collaboration with the Department of Education (CDE) to develop both a new equitable sliding scale for the payment of family fees, and an alternative methodology for calculating reimbursement rates for child care and development services programs provided under a reimbursement system plan and for the CSPP, as provided. The bill also requires funding and reimbursements for child care providers to be based on enrollment of certified children with the contract rates set using the alternative methodology.
ABSTRACT
Existing Law:
- Establishes the Early Education Act, and requires that CSPP provides an inclusive and cost-effective program that provide high-quality learning experiences, coordinated services, and referrals for families to access health, and social-emotional support services through full- and part-day programs. (EDC 8200 et seq.; 8201 et seq.; 8201(e))
- Finds that all families should have equitable access to a high-quality preschool program, regardless of race or ethnic status, cultural, religious, or linguistic background, family composition, or children with exceptional needs. Also finds that subsidized preschool services should be provided to all persons meeting the eligibility criteria, to the extent funding is made available, as specified. (EDC 8202 (a))
- Requires the CSPP to include, but not be limited to, part-day age and developmentally appropriate programs designed to facilitate the transition to kindergarten for three- and four-year-old children in educational development, health services, social services, nutritional services, parent education and parent participation, evaluation, and staff development. (EDC 8207)
- Requires parent paid fees for the CSPP be used to pay reasonable and necessary costs for providing additional services and further specifies how parent fees for all state subsidized early childhood services and CSPP can be used and assessed by the state Superintendent of Public Instruction (SPI) in conjunction with CDSS, as specified. (EDC 8242 (1), 8252 et seq.)
- Provides that it is the intent of the Legislature that a new fee schedule be simple and easy to implement, and requires CDSS, in consultation with the CDE, to establish a fee schedule for families using preschool and child care services, as specified. (WIC 10290(a-b))
- Requires that the new family fee schedule retains a single flat monthly fee per family that differentiate between fees for full- or part-time care, and that families be assessed a single fee for all state subsidized care services, including CSPP, that is based on income, a certified family need for care services, and enrollment, and not on actual attendance. Further provides that no recalculation of a family fee occur if attendance varies from enrollment unless a change in need for care is assessed. (WIC 10290(c))
- Establishes eligibility criteria for state subsidized child care and development services (child care) based on family and child circumstance, including, but not limited to, income, homelessness, or if a child is or has been abused, neglected or exploited, as specified. (WIC 10271 et seq)
- Requires that a family, for establishing the initial or ongoing eligibility for subsidized child care and development services programs, be considered to have met all eligibility requirements to receive those services for not less than 24 months without being required to report changes, or having their eligibility or need recertified, except in certain instances such as for the California Work Opportunity and Responsibility to Kids (CalWORKs) Stage 1, Stage 2, or Stage 3 programs for which the certification period is 12 months, as provided. (WIC 10271(h))
- Requires CDSS, in collaboration with CDE to implement a reimbursement system plan that establishes reasonable standards and assigned reimbursement rates, which vary with the length of the program year and the hours of service. (WIC 10280)
This Bill:
- Declares that it is the intent of the Legislature that this act implement the recommendations of the Rate and Quality Workgroup to create a new reimbursement rate structure for child care and CSPP.
- Prohibits child care and CSPP family fees from being collected until an equitable sliding scale is developed and implemented under a new family fee schedule.
- Requires CDSS, in collaboration with CDE to develop:
- An equitable sliding scale for the payment of family fees.
- An alternative methodology for calculating reimbursement rates for child care services provided under a reimbursement system plan and CSPP.
- Requires that the alternative reimbursement rate methodology:
- Builds on the recommendations of the established working group and is aligned with the recommendations of the Joint Labor Management Committee (JLMC).
- Uses a cost estimation model that includes all of the following:
- Program models will meet the current statutory and regulatory requirements for each program.
- Staff salaries and benefits.
- Training and professional development.
- Curricula and supplies.
- Group size and ratios.
- Enrollment levels.
- Facilities and other costs.
- Family engagement.
- Requires CDSS to develop a process to transition from the current reimbursement rates over to the new rates as funds are appropriated for these purposes in the annual Budget Act and to have the alternative methodology fully implemented commencing in the 2027–28 fiscal year.
- Requires any funding provided in the Budget Act of 2023 to increase the reimbursement rates distributed using the transition process until the new alternative methodology is adopted.
- Requires funding and reimbursements for child care providers to be based on enrollment of certified children with the contract rates set using the alternative methodology.
- Requires CDSS to review and update this new alternative methodology every three years and to seek preapproval from the U.S. Department of Health and Human Services (HHS) to amend the state’s current Child Care and Development Fund State Plan (State Plan) to change its current methodology for determining child care and CSPP reimbursement rates to an alternative methodology, as provided.
FISCAL IMPACT
This bill has not yet been analyzed by a fiscal committee.
BACKGROUND AND DISCUSSION
Purpose of the Bill:
According to the author, “SB 380 will help child care providers and families by transitioning providers to a single cost-based reimbursement rate, suspending family fees until an equitable sliding scale for family fees is established, and funding providers using an enrollment-based contract earning mechanism. This bill is a key opportunity to prioritize and support California’s youngest children and their families.”
The author further states, “California must make a multi-year commitment to adopting rate reform and provide an immediate down payment to address California’s child care crisis. Suspending family fees is an efficient anti-poverty solution that has already proven successful during the pandemic. It is time for the legislature and this administration to fix the child care crisis and transform child care and early learning in California to ensure young children and families can thrive.”
Complex System of Subsidized Child Care
The contracting system for early childhood education services in California is complicated. There are currently two different sections in the California Code of Regulations that establish two sets of standards for child care providers, Title 5 and Title 22, and two rate models. Additionally, providers are regulated by two different state departments, CDSS and CDE, and depending on their business models, might have multiple contracts for providing services. For example, under current law, one early learning contractor could have a CSPP contract to serve 3- and 4-year-olds, a general child care contract to serve infants and toddlers or school-age children, and a family child care home education network to partner with home-based providers to serve children.
On July 1, 2021, as authorized by SB 89 (Committee on Budget and Fiscal Review, Chapter 24, Statutes of 2020), most child care and development programs were transferred from CDE to CDSS. The transfer of these programs included: CalWORKs Stages 2 and 3; the Emergency Child Care Bridge Program; Alternative Payment Programs; Migrant Child Care; General Child Care; Child Care for Children with Disabilities; and a variety of local supports for these programs, such as Resource and Referral and Local Child Care Planning Councils, in addition to quality improvement projects. The change in department oversight was meant to reduce administrative and other barriers to program access so that providers can focus on positive outcomes for children and families. However, SB 98 did not transfer the CSPP from CDE to CDSS.
Child Care Provider Rates
In California, subsidized child care providers are paid in one of two ways: by accepting vouchers from families or by contracting directly with the state. Reimbursement rates for providers who accept vouchers vary based on the county in which the child is served. They are reimbursed by the state based on the Regional Market Rate (RMR) Survey. The RMR Survey measures a sample of prices charged by licensed child care providers and paid by parents within a given child care market region. The RMR survey is administered every two to three years, and provides “rate ceilings” based on provider setting and the age of the child for all 58 California counties. The rate ceiling is the highest payment a provider can receive from the state for the care of a child. Beginning in 2022, the RMR was set to the 75th percentile of the 2018 RMR survey. Alternative Payment agencies (APs), which issue vouchers to eligible families, are paid through the “administrative rate,” which provides them with 17.5 percent of total contract amounts.
Providers that contract directly with the state are paid with a statewide rate called the Standard Reimbursement Rate, which has typically been adjusted for factors such as the age of the child or disability status, but not on geographic cost factors and neither rate structure fully accounts for the actual cost of providing care to children. The bill would require CDSS, in collaboration with CDE, to develop an alternative methodology for calculating reimbursement rates for subsidized child care services and CSPP. The bill would also require the two department work together to develop an alternative methodology for calculating reimbursement rates for child care services provided under reimbursement system plan and CSPP.
In order to have one reimbursement rate structure for child care payments in California, the state and Child Care Providers United (CCPU), which is a union comprised of family child care providers within California, established a JLMC. The purpose of this JLMC was to develop recommendations for a single reimbursement rate structure to provide the Department of Finance (DOF) by no later than November 15, 2022. In 2022, CDSS, in consultation with CDE convened a working group to assess the methodology for establishing reimbursement rates and existing quality standards for subsidized child care and preschool programs. The Rate and Quality Workgroup recommendations relating to specified topics were provided to the JLMC, the Department of Finance (DOF), and the Joint Legislative Budget Committee by August 15, 2022. The Rate and Quality Workgroup included representatives from CCPU, teacher and administrator representatives of state-funded center based contractors, child care and development experts, parent representatives, a head start representative, an alternative payment program agency representative, and representatives from the administration, among others.
The Rate and Quality JLMC Joint Presentation for a Single Rate Structure Alternative Methodology proposal summary dated November 14, 2022, in part, states “This document summarizes the parties’ agreed upon approach to a single rate structure (inclusive of the agreed upon alternative methodology) and offers metrics for assisting with determining base rate setting. The single rate structure includes: 1. an alternative methodology that considers a cost estimation model; 2. base rates; 3. incentives/enhancement rate setting metrics; and, 4. evaluation of the rate structure….The alternative methodology will include a cost model. The single rate structure will be used to establish a base rate for different program settings.” Additionally, the proposal base rate metrics will include current state and federal requirements, equity, cost estimation and process metrics.
The Governor’s January 10th Budget proposal acknowledged the above workgroup activities and noted “the state will rely on the presented approach as it continues to develop a single rate structure… [and] will continue to work with CCPU to negotiate a successor agreement to the current agreement expiring June 30, 2023.” Rates are an issue currently subject to CCPU collective bargaining; however, for the stability of the system, rates need to also support non-CCPU providers as well.
This bill would require CDSS to develop a process to transition from the current reimbursement rates over to the new rates as funds are appropriated for these purposes in the annual Budget Act and to have the alternative methodology fully implemented in the 2027–28 fiscal year.
COVID-19 Pandemic Impacts on Child Care and Budget Investments
Prior to the disruptions caused by COVID-19, more than 1.2 million children in California were enrolled in early learning and care programs across the state. From the start of the pandemic in March 2020 through the end of October 2020, CDSS estimates approximately 2,030 family child care homes and 390 child care centers closed permanently. When looking at numbers over the entirety of the pandemic, a lesser impact is reported. Data suggests that between March 2020 and December 2021 there was only a 0.7 percent decrease in the number of licensed child care providers. Yet reporting and anecdotal evidence suggest periodic temporary closures during various points of the pandemic had a much greater impact on overall statewide capacity and made it difficult for families to obtain child care while parents work, attend school, and perform other necessary activities.
In response to the COVID-19 pandemic, the 2020-2021 and 2021-22 Budget Acts made numerous investments in child care and CSPP by utilizing state and federal funds to provide: temporary emergency vouchers; cleaning supplies and personal protective equipment; temporary supplemental rates to providers; one-time funding for infrastructure grants for the building of new facilities or renovation, repair, or expansion of existing facilities; a suspension of family fee contributions for subsidized child care; and increased reimbursement flexibility for providers accepting vouchers. The 2022-23 Budget Act through AB 210 (Committee on Budget, Chapter 62, Statutes of 2022) also continued some of the investments made during the height of the pandemic, including, but not limited to: providing child care providers with additional stipends; increasing subsidized child care program access to 145,000 slots; and continuing hold harmless policies for both contract and voucher based care providers; and family fee waivers for state subsidized child care programs and CSPP through June 30, 2023.
Hold Harmless Policies
The 2020 through 2022 Budget Acts included state funds and federal COVID-19 funds to “hold harmless” child care and CSPP providers who had to reduce services or close their homes or facilities to children due to COVID-19. These temporary Covid-19 reimbursement flexibilities were provided to voucher and direct contract child care providers and CSPP providers. Prior to the pandemic, voucher-based providers were reimbursed either based on the maximum certified hours of care for families with consistent vouchers or actual attendance for families with variable schedules. During COVID-19, all voucher-based providers received funding based on the maximum certified hours of care for enrolled children, rather than actual attendance. For example, if an enrolled child with a variable schedule is certified to receive a maximum of 10 hours of care, but only received 5 hours of care, the provider would still receive full payment based on maximum certified hours of care during COVID-19 pandemic.
Providers that directly contract with the state received 100 percent of their contract maximum reimbursable amount or actual net reimbursable program costs, whichever is less. For example, if a provider’s contract provided funding to serve up to 15 children, but the provider only served 10 children, the provider would still receive funding associated with serving 15 children. Prior to the pandemic, direct contract providers were generally reimbursed based on the attendance of eligible children. Beginning on July 1st, 2023 these provisions will cease and all providers will go back to pre-pandemic reimbursement policies.
Other hold harmless provisions are related to provider rates. For FY 2021-22, the Budget Act included provisions to have one rate model for direct contract child care and CSPP providers. This means that child care providers who received a rate under the Standard Reimbursement Rate would instead receive the RMR. However, for some providers, the RMR was lower than what they would receive if they remained on the Standard Reimbursement Rate. The state held those providers harmless by allowing these providers to stay on the Standard Reimbursement Rate if it was higher than the RMR. Additionally, when the state moved to the 2018 RMR survey in 2021-22, voucher-based providers were allowed to keep their old RMR rate if the new rate under the 2018 RMR survey was lower.
According to the sponsors of the bill, the rate increases have not kept up with inflation and the costs to provide quality care to children. A 2022 survey of large family child care owners completed by the Child Care Resource Center (CCRC) found that “while the COVID-19 related funding helped to prevent some child care closures, the funding will not provide longer-term stability to these programs”. The CCRC survey also said “the one-time nature of this funding has placed programs on unstable footing, unsure about the sustainability of their businesses, and needing to pay back debt and loans taken over the past two years.” This bill seek to ensure there is a new rate methodology developed for child care and CSPP.
CDSS submitted a letter on March 28, 2023 seeking federal approval from the Administration for Children and Families (ACF) for California to use a cost-based alternative to the RMR. According to CDSS, they have contracted with national experts, Prenatal to Five Fiscal Strategies, who also work with the Rate and Quality Workgroup in 2022. This is the first step in the process to replace the RMR methodology.
Family Fees
Prior to 2021, families enrolled subsidized child care and CSPP were required to pay a fee to the providers. Under state law and federal mandates, CDSS must establish a family fee schedule for families receiving child care services based on the most recent census data available on state median family income in the past 12 months, adjusted for family size, subject to the approval of the Department of Finance. The family fee schedule is differentiate between full-time fees and part-time fees and families are assessed a flat monthly fee. Assessment of the monthly fee is based on the following factors:
•Hours of certified need as documented on the application for services
•The family’s adjusted monthly income
•Family size
Family fees cannot exceed the full-time monthly fee on the family fee schedule for the family size and income provided, however under the 2023 schedule these fees can range from $0-$700 per month depending on the above criteria.
AB 210 (Committee on Budget, Chapter 62, Statutes of 2022) allowed for family fees to be waived between July 1, 2022, and June 30, 2023, for all families receiving child care subsidies through the following programs: Alternative Payment Programs, including Migrant Alternative Payment Programs; Migrant Child Care and Development Programs; General Child Care and Development Programs; Family Child Care Home Education Networks; Child Care and Development Services for Children with Special Needs; and CalWORKs Stages One, Two, and Three. Although family fees are being waived for FY 2022–23, CSPP contractors are still required to calculate and assess the applicable family fee at initial certification and recertification as usual. According to CDE, this requirement is to ensure that contractors report the correct family fee amount(s) that are being waived and that families are aware of the updated fee that will be applicable July 1, 2023. The bill would also prohibit the collection of family fees until a new sliding scale is implemented.
Child Care and Development Fund (CCDF)
The federal Child Care and Development Fund (CCDF) is an aggregate of several funding sources that is distributed in block grants by the federal government to the states and territories. According to CDSS’s website, California splits the funds in three ways: provide child care services to families who meet certain income and need criteria, activities to improve the quality of child care, and to pay for costs to administer the CCDF. The purpose of the CCDF is to increase the availability, affordability, and quality of child care services. States and territories receiving CCDF funds must prepare and submit to the federal government a plan detailing how these funds will be allocated and expended. CDSS is the lead agencies for receipt of CCDF.
Under the federal CCDF Discretionary Funds Appropriated in the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act (Public Law 116-260), signed into law on December 27, 2020, states were afforded additional flexible funding during the COVID-19 pandemic that could be used to provide relief to child care providers and for families struggling to pay for child care, among others things. However, under federal CCDF rules, lead agencies “may waive co-payments for certain families, including those with incomes below the federal poverty level, but may not waive copays [i.e. family fees] for all families.” Also under CCDF rules, “a [CCDF] Plan amendment is required for any substantial program change (e.g., change in eligibility, rates, copays, etc.). Changes based on the additional flexibilities allowed by the CRRSA Act require an amendment, but not a waiver, including waiving copays for all families.” This means that the state would not be able to waive all copays for families without first changing the State Plan and receiving federal approval to do so beyond June 30, 2023. The current State Plan expires in 2024.
This bill would require CDSS to apply to the federal Health and Human Services Agency to amend the current State Plan to change reimbursement rates to an alternative methodology, including a cost-based model that is consistent with the recommendations of the Rate and Quality Workgroup report.
Related/Prior Legislation:
AB 596 (Reyes, 2023) is identical to this bill. AB 596 will be heard by the Assembly Education Committee on April 26, 2023.
SB 976 (Leyva, 2022) would have established the Universal Preschool Act to expand access to and operation hours of CSPP to all three- and four-year-old children regardless of family income; would have expanded the types of child care providers who may be eligible to offer a universal preschool program to Head Start centers and licensed family daycare facilities; would have waived family preschool fees; and, would have required the Superintendent of Public Instruction in consultation with the Director of CDSS to convene a statewide coordination council, and adopt rules and regulations for the administration of all universal preschool programs.
AB 210 (Committee on Budget, Chapter 62, Statutes of 2022) among other things, allowed for family fees to be waived between July 1, 2022, and June 30, 2023, for all families receiving child care subsidies.
AB 92 (Reyes, 2022) would have made changes to the amount of family fees collected for preschool and child care and development services and would have prohibited providers from absorbing any reduction in pay due to waivers in family fees. This bill was vetoed by the Governor.
AB 131 (Chapter 116, Statutes of 2021) transferred all statutes applicable to the transferred programs from the EDC) to WIC, including EDC Section 8263 which was transferred to the WIC as Section 10271.
SB 246 (Leyva, 2021) would have required CDSS to establish a single reimbursement rate for early learning and care programs, including variation for regional costs and quality adjustment factors. This bill was held in the Assembly Education Committee.
SB 174 (Leyva, 2019) would have required that specified providers of subsidized child care be reimbursed based upon an updated RMR as of January 1, 2021; would have established the “Quality Counts California Pilot Reimbursement Program,” to provide higher reimbursement rates to APP providers for meeting certain quality standards; and, would have made the enactment of the bill contingent upon the enactment of related legislation, as specified. This bill was held in the Assembly Appropriations Committee.
SB 820 (Committee on Budget and Fiscal Review, Chapter 110, Statutes of 2020) amongst other things, waived, from September 1, 2020, to June 30, 2021, family fees for specified subsidized early learning and care programs for families who are not receiving in-person services or who are sheltering-in-place due to COVID-19.
AB 86 (Committee on Budget and Fiscal Review, Chapter 48, Statutes of 2019) amongst other things, simplified family fees for families receiving state-subsidized child care by creating a process for the CDE to adopt a new fee schedule that will provide more predictable fees through a cost-neutral change to the current fee structure and required CDE to report family fees collects for preschool programs to the Department of Finance
COMMENTS
California’s mixed child care and development delivery system is designed to provide parents the flexibility to select the type of subsidized care that works best for their family. Subsidized child care may be offered in either child care centers or home settings. Many families currently enrolled in subsidized child care and CSPP over the last three years have never had to pay a family fee to receive care. The provisions of this bill would require CDSS, in collaboration with CDE, to develop a new sliding scale for the payment of family fees for families with children attending subsidized child care and CSPP and continue to waive the family fees until a new sliding scale is implemented.
Although California has been able to waive family fees due to federal flexibility and the availability of additional CCDF funding until June 30, 2023, under CCDF rules, “a [CCDF] Plan amendment is required for any substantial program change (e.g., change in eligibility, rates, copays, etc.).” This means that this bill’s mandate to continue to waive these fees until a new sliding scale is implemented may not be possible without first making a change to the State Plan and then receiving federal approval. Despite federal approval not being certain, it may be warranted for the state to pursue this option, as some families could again be unable to afford the price of their child care once providers resume fee collection.
POSITIONS
Support:
California Family Child Care Network
California Legislative Women's Caucus
Child Care Resource Center
Crystal Stairs, INC.
Edvoice
Everychild California
Friends Committee on Legislation of California
Goleta; City of
Grace Institute - End Child Poverty in Ca
John Burton Advocates for Youth
Kern County Superintendent of Schools Office
Low Income Investment Fund
National Women's Political Caucus of California
Parent Voices California
The Education Trust - West
Oppose:
None received
-- END --
Discussed in Hearing
8MIN
Assembly Standing Committee on Education
11MIN
Assembly Standing Committee on Human Services
3MIN
Senate Floor
12MIN
Senate Standing Committee on Education
8MIN
Senate Standing Committee on Human Services
Bill Author
